Question: Three mutually exclusive alternatives are being considered. Each alternative has a 20-year useful life with no salvage value . If the minimum attractive rate of

Three mutually exclusive alternatives are being considered.

A B Initial investment $15.000 $50.000 $22.000 Annual net income 5.093 2.077 1.643 Computed rate 8% 7%

Each alternative has a 20-year useful life with no salvage value. If the minimum attractive rate of return is 7%, which alternative should be selected?

A B Initial investment $15.000 $50.000 $22.000 Annual net income 5.093 2.077 1.643 Computed rate 8% 7%

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