3. Ch: 5 Determine the better of the two alternatives based on present worth analysis. OPTIONS = INITIAL COST ANNUAL MAINTENANCE ANNUAL BENEFIT SALVAGE AFTER LIFE LIFE IN YEARS MARR Type-A 12,000 1,000 7,000 2,000 2 12% Type-B 15,000 500 7,000 4,000 3 12% 4 Ch: 6 Using annual cash flow analysis (EUA), determine the better alternative. Assume that alternatives are replaced at the end of their useful lives. The interest rate is 9%. OPTIONS => INITIAL COST ANNUAL MAINTENANCE ANNUAL BENEFIT SALVAGE AFTER LIFE LIFE IN YEARS MARR ALT X 4,000 1000 2,000 1,000 4 12% ALT Y 6,000 500 2,500 2,000 5 12%