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Alternative A Alternative B Сapital $23,000 $25,000 Investment Annual expenses $8,852 $9,503 Annual revenue $15,492 $17,381 Market Value at $2,000 $2,100 end of useful life Life 4 years 12 years IRR 19.3% 15.7%

Alternative A Alternative B Сapital $23,000 $25,000 Investment Annual expenses $8,852 $9,503 Annual revenue $15,492 $17,381 Market Value at $2,000 $2,100 end of useful life Life 4 years 12 years IRR 19.3% 15.7%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What is the FW of Alternative A and B?

Which alternative should be recommended?

 

solve normally, no excel. thanks!

The table provides a comparison of two investment alternatives, A and B, across various financial metrics: 1. **Capital Investment:** - Alternative A: $23,000 - Alternative B: $25,000 2. **Annual Expenses:** - Alternative A: $8,852 - Alternative B: $9,503 3. **Annual Revenue:** - Alternative A: $15,492 - Alternative B: $17,381 4. **Market Value at End of Useful Life:** - Alternative A: $2,000 - Alternative B: $2,100 5. **Life:** - Alternative A: 4 years - Alternative B: 12 years 6. **Internal Rate of Return (IRR):** - Alternative A: 19.3% - Alternative B: 15.7% This information can help in evaluating the cost-effectiveness and profitability of each investment option.
Transcribed Image Text:The table provides a comparison of two investment alternatives, A and B, across various financial metrics: 1. **Capital Investment:** - Alternative A: $23,000 - Alternative B: $25,000 2. **Annual Expenses:** - Alternative A: $8,852 - Alternative B: $9,503 3. **Annual Revenue:** - Alternative A: $15,492 - Alternative B: $17,381 4. **Market Value at End of Useful Life:** - Alternative A: $2,000 - Alternative B: $2,100 5. **Life:** - Alternative A: 4 years - Alternative B: 12 years 6. **Internal Rate of Return (IRR):** - Alternative A: 19.3% - Alternative B: 15.7% This information can help in evaluating the cost-effectiveness and profitability of each investment option.
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