Question: Three mutually exclusive alternatives are being considered. A B C Initial Investment $50,000 $22,000 $15,000 Annual Net Income $5,093 $2,077 $1,643 Rate of Return 8%

Three mutually exclusive alternatives are being considered.

A

B

C

Initial Investment

$50,000

$22,000

$15,000

Annual Net Income

$5,093

$2,077

$1,643

Rate of Return

8%

7%

9%

Each alternative has a 20-year useful life with no salvage value.

Construct a choice table for interest rates from 0% to 100%

If the minimum attractive rate of return is 7%, which alternative should be selected?

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