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Aline has three contracts from which to choose. The first contract will require an outlay of $ 100,000, but will return $ 150,000, one year from now. The second contract requires an outlay of $ 200,000, and will return $ 300,000, one year from now. The third contract requires an outlay of $250,000, and will return $ 355,000, one year from now. Only one contract can be accepted. If her MARR is 20%, which one should she choose?

Aline has three contracts from which to choose. The first contract will require an outlay of $ 100,000, but will return $ 150,000, one year from now. The second contract requires an outlay of $ 200,000, and will return $ 300,000, one year from now. The third contract requires an outlay of $250,000, and will return $ 355,000, one year from now. Only one contract can be accepted. If her MARR is 20%, which one should she choose?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Aline has three contracts from which to choose. The first contract will require an outlay of $ 100,000, but will return $ 150,000, one year from now. The second contract requires an outlay of $ 200,000, and will return $ 300,000, one year from now. The third contract requires an outlay of $250,000, and will return $ 355,000, one year from now. Only one contract can be accepted. If her MARR is 20%, which one should she choose?
Transcribed Image Text:Aline has three contracts from which to choose. The first contract will require an outlay of $ 100,000, but will return $ 150,000, one year from now. The second contract requires an outlay of $ 200,000, and will return $ 300,000, one year from now. The third contract requires an outlay of $250,000, and will return $ 355,000, one year from now. Only one contract can be accepted. If her MARR is 20%, which one should she choose?
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