A firm is considering the following alternatives, as well as a fifth choice: do nothing.

Each alternative has a 5-year useful life. The firm's minimum attractive rate of return is 8%. Which alternative should be selected?

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2 3 Initial cost $100,000 $130,000 $200,000 $330,000 Uniform annual 26.38 38.78 47.48 91.55 net income ($1000s) Computed rate 12% 10% 15% 6% of return