The B Company has a policy of requiring a rate of return on investment of 16%. Two investment alternatives are available but the company may choose only one. Alternative 1 offers a return of $50 000 after 4 years, $40 000 after 7 years, and $30 000 after 10 years. Alternative 2 will return the company $750 at the end of each month for 10 years.

How much is the investment from Alternative 1? Round answer to zero decimal placesi.e. $89,578i got the alternative 1 right48568

but i cant get How much is the investment from Alternative 2? Round answer to zero decimal placesi.e. $89,578 i keep geting44772.61i asked my teacher and she said

Your value of r is incorrect.Payments are monthly and therate of return is compounded yearly.So you have to calculate the EFFECTIVE rate

2nd 2 - gives you ICONV

• NOM=16
• C/Y=1
• EFF CPT
• C/Y=12
• NOM=CPT=14.934166

So that means 16% compounded annually is 14.9% compounded monthly.Use that number for r (remember to divide by 12) but i still get it wrong.