An expenditure may be met by outlays of $3000 now and $1000 at the end of every six months for 5 years or by making monthly payments of $250 in advance for three years. Interest is 12% compounded annually.
Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion.

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The Answer of An expenditure may be met by outlays of $3000 now and $1000 at the end of every six months for 5 years or by making monthly payments of $250 in advance for three years. Interest is 12% compounded annually.
Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion.

An Expenditure May Be Met by Outlays of $3000 Now