Spencer Enterprises is attempting to choose among a series ofnew investment alternatives. The potential investment alternatives,the net present value of the future stream of returns, the capitalrequirements, and the available capital funds over the next threeyears are summarized as follows:
| CapitalRequirements ($) | |||||||||
| Alternative | Net PresentValue ($) | Year1 | Year2 | Year3 | |||||
| Limited warehouse expansion | 4,000 | 3,000 | 1,000 | 4,000 | |||||
| Extensive warehouse expansion | 6,000 | 2,500 | 3,500 | 3,500 | |||||
| Test market new product | 10,500 | 6,000 | 4,000 | 5,000 | |||||
| Advertising campaign | 4,000 | 2,000 | 1,500 | 1,800 | |||||
| Basic
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