A Company Has Two Investment Choices

question 19

Essay

A company has two investment choices. Alternative A requires an immediate outlay of $4000.00 and offers a return of $14 000.00 after seven years. Alternative B requires an immediate outlay of $3600.00 in return for which $500.00 will be received at the end of every six months for the next seven years. If the rate of return is 6% compounded semi-annually, determine which alternative is preferable.

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Definitions:

Creative Growth

The process of developing innovation and creativity, often leading to new ideas, products, or artistic expressions.

Majority Community

A demographic or social group in a society that represents the largest percentage of the population.

Person-Organization Fit

The degree to which an individual's values, personality, and work style align with the culture and requirements of an organization.

Nonprofit Organization

An organization whose primary objective is to support an issue or matter of private interest or public concern for non-commercial purposes, without seeking to generate a profit for its owners or organizers.