Sunshine Company is considering the purchase of a piece of equipment. It is exploring two alternatives as follows: Alternative #1: A $15,000 purchase price, with annual maintenance costs at the end of each of the next 10 years of $400. It is expected that the equipment can be sold at the end of the 10th year for $1,000. Alternative #2: A $17,000 purchase price, with a one-time maintenance cost of $1,200 at the end of year 5, and no expected residual value at the end of the expected 10-year useful life. Which one of the following is the decision rule which Sunshine Company should use with respect to whether it chooses Alternative #1 or Alternative #2. An appropriate rate of interest is 8%. Multiple Choice It should choose the alternative for which the present value (PV) of the future cash flows is the smallest. 0 It should choose the alternative for which the (non-discounted) value of the future cash flows is the largest 0 It should choose the alternative for which the future value (FV) of the future cash flows is the largest 8 of 9 11 Prex Next >