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Sunshine Company is considering the purchase of a piece of equipment. It is exploring two alternatives as follows: Alternativ
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Answer #1

The right option is 1st "It should choose the alternative for which the present value (PV) of the future cash flows is the smallest.

As this shows that the selected alternative will be cheaper as compared to the other alternative and it is financially good for the company to purchase the equipment which results in less cash outflow.

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