Two different alternatives are being compared. Using Net Present Worth Analysiswhich alternative is best? Use an interest rate of 9%.AlternativeInitial CostAВ$ 1,425 $ 2,168$ 1,325 $$Annual Benefit620Salvage ValueUseful Life (years)465 $89739.A is the best alternativeChoose neither alternativeChoose either alternativeB is the best alternative

Ne Present Worth: It Is the difference between the present value of cash outflow and inflows over…

Two different alternatives are being compared. Using Net Present Worth Analysis which alternative is best? Use an interest rate of 9%. Alternative Initial Cost Annual Benefit Salvage Value Useful Life (years) A В $ 1,425 $ 2,168| $ 1,325 $ $ 620 465 $ 897 3 9.

Two different alternatives are being compared. Using Net Present Worth Analysis which alternative is best? Use an interest rate of 9%. Alternative Initial Cost Annual Benefit Salvage Value Useful Life (years) A В $ 1,425 $ 2,168| $ 1,325 $ $ 620 465 $ 897 3 9.

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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Question

Two different alternatives are being compared. Using Net Present Worth Analysis
which alternative is best? Use an interest rate of 9%.
Alternative
Initial Cost
A
В
$ 1,425 $ 2,168
$ 1,325 $
$
Annual Benefit
620
Salvage Value
Useful Life (years)
465 $
897
3
9.
A is the best alternative
Choose neither alternative
Choose either alternative
B is the best alternative

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