Compare the alternatives shown below on the basis of their present worth, using an interest rate of 18% per year. Highlight the best option. Alternative L M N Initial costs $238,000 $213,000 $253,000 Annual revenues $69,000 in year 1, increasing by $190 each year $60,000 $69,000 in years 1 to 5, $69,570 in years 6 to 16 Life, years 16 16 16
Compare the alternatives shown below on the basis of their present worth, using an interest rate of 18% per year. Highlight the best option. Alternative L M N Initial costs $238,000 $213,000 $253,000 Annual revenues $69,000 in year 1, increasing by $190 each year $60,000 $69,000 in years 1 to 5, $69,570 in years 6 to 16 Life, years 16 16 16
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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Compare the alternatives shown below on the basis of their present worth, using an interest rate of 18% per year. Highlight the best option.
| Alternative | L | M | N |
| Initial costs | $238,000 | $213,000 | $253,000 |
| Annual revenues |
$69,000 in year 1, increasing by $190 each year |
$60,000 |
$69,000 in years 1 to 5, $69,570 in years 6 to 16 |
| Life, years | 16 | 16 | 16 |
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