Question: Consider the following alternatives: Use present worth analysis, an 8% interest rate, and an infinite analysis period. Which alternative should be selected in each of

Consider the following alternatives:

A B Initial cost $200.00 55.48 $100.00 $150.00 Uniform annual benefit Useful life, in years 17.62 10.00 Infinite 20 5

Use present worth analysis, an 8% interest rate, and an infinite analysis period. Which alternative should be selected in each of the two following situations?

1. Alternatives B and C are replaced at the end of their useful lives with identical replacements.

2. Alternatives Band C are replaced at the end of their useful lives with alternatives that provide an 8% rate of return.

A B Initial cost $200.00 55.48 $100.00 $150.00 Uniform annual benefit Useful life, in years 17.62 10.00 Infinite 20 5

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