Compare the Alternatives Shown Below on the Basis of Their

Essay

Compare the alternatives shown below on the basis of their future worth, using an interest rate of 14% per year, compounded quarterly. Which alternative should be selected? $$\begin{array} { | l | l | l | } \hline \text { Alternative } & A & B \\\hline \text { Initial costs } & \$ 421,000 & \$ 1,171,000 \\\hline \text { Quarterly revenues } & \$ 46,000 & \$ 71,000 \\\hline \text { Quarterly expenses } & \$ 17,000 & \$ 18,500 \\\hline \text { Disposal costs } & \$ 6750 & \$ 6250 \\\hline \text { Life, years } & 12 & 24 \\\hline\end{array}$$