The present worth of alternative B is nearest: (a) $85,000 (b) $750,000 (c) $850,000 (d) $950,000 Problem

The present worth of alternative B is nearest:

(a) $ˆ’85,000

(b) $ˆ’750,000

(c) $ˆ’850,000

(d) $ˆ’950,000

Problem is based on the following cash flows for alternatives A and B at an interest rate of 10% per year.

Transcribed Image Text:

Alternative First cost, $ AOC, $/year Salvage value, $ Life, years B -90,000 -750,000 - 50,000 -10,000 2,000,000 8,000 5