Develop a cash flow diagram (CFD) for an alternative
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1) If an alternative has monthly payments of $12,000 a month for three years with a
purchase price of $75,000 at the end of year three, what would the cash flow diagram
look like? Select the correct choice from each pair of answers.
A: $144,000 EOY 1
B: $144,000 MOY 1
C: $144,000 EOY 2
D: $144,000 MOY 2
E: $144,000 EOY 3
F: $144,000 MOY 3
G: $75,000 EOY 3
H: $75,000 MOY 3
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Solution Summary
Using the examples, the correct choice from two alternatives is chosen for the cash flow diagram based on EOY (End of Year) or MOY (Middle of Year).
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Dear student,
The full solution is attached with the required explanation.
Regards,
Radhika
Conditions for EOY/MOY categorization:
EOY: To assume for investments or receipts (at year 0), for salvage value or disposal ...
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