Question 1 Data for two alternatives are as follows: A B INVESTMENT 35,000 50,000 ANNUAL BENEFITS 20,000 25,000 ANNUAL O&M 6,450 13,830 ESTIMATED LIFE YEARS 4 8 NET SALVAGE VALUE 3,500 Using an interest rate of 20%, which alternative should be chosen? Use the Annual Conventional Method: Blank 1 Use the Annual Modified I Method: Blank 2

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
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Question 1
Data for two alternatives are as follows:
A
B
INVESTMENT
35,000
50,000
ANNUAL BENEFITS
20,000
25,000
ANNUAL O&M
6,450
13,830
ESTIMATED LIFE YEARS
4
8
NET SALVAGE VALUE
3,500
Using an interest rate of 20%, which alternative should be chosen?
Use the Annual Conventional Method: Blank 1
Use the Annual Modified I Method: Blank 2
Transcribed Image Text:Question 1 Data for two alternatives are as follows: A B INVESTMENT 35,000 50,000 ANNUAL BENEFITS 20,000 25,000 ANNUAL O&M 6,450 13,830 ESTIMATED LIFE YEARS 4 8 NET SALVAGE VALUE 3,500 Using an interest rate of 20%, which alternative should be chosen? Use the Annual Conventional Method: Blank 1 Use the Annual Modified I Method: Blank 2
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