Calculate the present value of alternative

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Suppose you are given the following three cash inflows from which to choose.

Alternative A: Year-end receipts of $8,000 for each of the next four years

Alternative B: A Single, lump-sum receipt of $33,000 at the end of the fourth year

Alternative C: Year-end receipt of $2,500 for each of the next four years plus a lump-sum receipt of $25,000 at the end of the fourth year

Suppose the annual discount rate is 8%, calculate the present value of each alternative. Which Alternative should be chosen and why?

Reference no: EM132825851

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