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# Calculating Net Present Worth

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A Commercial Fisherman needs to purchase a new boat. He is considering three alternatives A, B & C. Boat A costs \$200,000. and is expected to produce net revenues of \$50,000 per year. Boat B costs \$290,000 and is expected to produce net revenues of \$75,000 per year. Boat C costs \$225,000 and is expected to produce revenues of \$60,000 per year. Salvage value at the end of the five year life of each boat is estimated to be \$25,000. The fisherman's minimum attractive rate of return is 6%.

1. The Net Present Worth of Boat A is:
(Express your answer to 3 significant digits with trailing zeros as required: XXX00., or XXX0., or XXX. for positive present worth or -XXX00., -XXX0. or -XXX. for negative present worth)

2. The Net Present Worth of Boat B is:
(Express your answer to 3 significant digits with trailing zeros as required: XXX00., or XXX0., or XXX. for positive present worth or -XXX00., -XXX0. or -XXX. for negative present worth)

3. The Net Present Worth of Boat A is:
(Express your answer to 3 significant digits with trailing zeros as required: XXX00., or XXX0., or XXX. for positive present worth or -XXX00., -XXX0. or -XXX. for negative present worth)

4. What should the Fisherman do?