6-28. Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen): Lead

Question:

6-28. Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen):

Lead Acid Lithium Ion Capital investment $6,000 $14,000 Annual expenses $2,500 $2,400 Useful life 12 years 18 years Market value at $0 $2,800 end of useful life The MARR is 5% per year. (6.5)

a. Determine which alternative should be selected if the repeatability assumption applies.

b. Determine which alternative should be selected if the analysis period is 18 years, the repeatability assumption does not apply, and a battery system can be leased for $8,000 per year after the useful life of either battery is over.

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