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Three mutually exclusive alternatives are being considered. A B C Initial Investment $50,000 $22,000 $15,000 Annual Net Income $5,093 $2,077 $1,643 Rate of Return 8%
Three mutually exclusive alternatives are being considered.
|
| A | B | C |
| Initial Investment | $50,000 | $22,000 | $15,000 |
| Annual Net Income | $5,093 | $2,077 | $1,643 |
| Rate of Return | 8% | 7% | 9% |
Each alternative has a 20-year useful life with no salvage value.
Construct a choice table for interest rates from 0% to 100%
If the minimum attractive rate of return is 7%, which alternative should be selected?
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