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Compute the present value of alternative

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A company must make a choice between two investment alternatives. Alternative 1 will return the company ?$25,000 at the end of two years and ?$60,000 at the end of seven years. Alternative 2 will return the company ?$6,000 at the end of each of the next seven years. The company normally expects to earn a rate of return of 18?% on funds invested.

Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion.

Answer:

The present value of Alternative 1 is ?$__?

?(Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as? needed.)

Reference no: EM132679249

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