1. Two investment opportunities are as follows:

	A	B
First cost	$150	100
Uniform annual benefit	25	22.25
End-of-useful-life salvage value	20	0
Useful life, in years	15	10

At the end of 10 years, Alt. B is not replaced. And terminal value of Alt. A is 40. If the MARR is 10%, which alternative should be selected based on NPV (or NPW) analysis?

2.

Two mutually exclusive alternatives are being considered. Both have lives of 5 years. Alternative A has a first cost of $2,500 and annual benefits of $746. Alternative B costs $6,000 and has annual benefits of $1,664. MARR is 6%.

Draw the cash flow diagram for the incremental project B-A.

which alternative should be selected using Net Future Value analysis?

which alternative should be selected using Annual Worth analysis ?