Compute the present value of each alternative

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Problem 1: A company must make a choice between two investment alternatives. Alternative 1 will return the company ?$35,000 at the end of two years and ?$75,000 at the end of eight years. Alternative 2 will return the company ?$10,000 at the end of each of the next eight years. The company normally expects to earn a rate of return of 9?% on funds invested. Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion.

Reference no: EM132913997

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