A Financial Manager Must Choose Between Four Alternative Investments, 1

question 68

Multiple Choice

A financial manager must choose between four alternative investments, 1, 2, 3, and 4. Each assetcosts $35,000 and is expected to provide earnings over a three-year period as described below. $\begin{array}{rrrr}\text { Asset }&\text { Year } 1&\text { Year } 2&\text { Year } 3\\1 & \$ 21,000 & \$ 15,000 & \$ 6,000 \\2 & 9,000 & 15,000 & 21,000 \\3 & 3,000 & 20,000 & 19,000 \\4 & 6,000 & 12,000 & 12,000\end{array}$ Based on the profit maximization goal, the financial manager would choose

• A) Asset 1.
• B) Asset 2.
• C) Asset 3.
• D) Asset 4.

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