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Three mutually exclusive alternatives are being considered.
A B C
Initial Investment $50,000 $22,000 $15,000
Annual net income 5093 2077 1643
Computed rate of return 8% 7% 9%
Each alternative has a 20-yr useful life with no salvage value.
In constructing a choice table for interest rates from 0% to infinity,
| Choice table | | |
| From | To | Go with |
| 0% | ? | ? |
| ? | ? | ? |
| ? | infinity | ? |
Question:
A) In the first row: To ________% ?
| | | 9% |
| | | 7.6% |
| | | 8% |
| | | 2.1% B) In the second row: To ________% ? C) In the first row: Go with alternative ________? D) In the second row: Go with alternative ________? E) In the third row: Go with alternative ________? F) If the minimum attractive rate of return is 7%, Go with alternative ________? |
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