A company has a policy of requiring a rate of return on investment of 13%. Two investment alternatives are available but the company may choose only one. Alternative 1 offers a return of $30,000 at the end of year three, $60,000 at the end of year nine and $40,000 after eleven years. Alternative 2 will return the company $500 at the end of each month for the next eleven years. Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion.
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here