You are considering two home security companies for your new house. The first company offers free installation and equipment, but will charge you $401.00 per year forever. The second company charges $783.00 for installation, but will charge you $204.00 per year forever. Assume that payments are at the END of the year. Your personal interest rate is 5.00% per year, and you want to evaluate each proposal. What is the present value (PV) of the free installation?
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