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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Transcribed Image Text:Complete the following analysis of investment alternatives and select the preferred alternative. The study period is
three years and the MARR = 15% per year.
Alternative Alternative Alternative
A
B
C
Capital investment
Annual revenues
Annual costs
Market value at EOY 3
PW (15%)
Click the icon to view the interest and annuity table for discrete compounding when i=15% per year.
OA. Alternative A
OB. Alternative C
OC. Alternative B
OD. Do Nothing
$11,000
3,900
240
4,900
578
The PW of the alternative B is $ (Round to the nearest dollar.)
Select the preferred alternative. Choose the correct answer below.
$15,000
6,500
450
6,100
???
$13,100
5,500
400
2,800
385
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