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Two alternative investments require the same cash outlay. Their net cash returns are as follows: ALTERNATIVE A: $ 2 0 , 0 0 0 each
Two alternative investments require the same cash outlay. Their net cash returns are as follows: ALTERNATIVE A: $ each year for five years beginning one year from now. ALTERNATIVE B: $ each year for years beginning one year from now. If money is worth compounded annually, which investment alternative should be chosen? What is the size of the current economic advantage of the preferred alternative?
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