4. You have been asked to perform an economic analysis on two different possible courses of action shown below. Using an interest rate of 7%, determine which course of action should be chosen. (Ans. EUAC Alt. #1 = $17,961; EUAC Alt. #2 = $15,827; Alt. #2 is the more economical choice.) Initial Investment O&M Costs Salvage Expected Life Alternative 1 $200,000 $2,000 annually $15,000 30 years Alternative 2 $100,000 $1,200 the first year and growing by $1,200 each year until it reaches $6,000. After reaching $6,000, it remains the same for the rest of the expected life. $0 15 years

4. You have been asked to perform an economic analysis on two different possible courses of action shown below. Using an interest rate of 7%, determine which course of action should be chosen. (Ans. EUAC Alt. #1=$17,961; EUAC Alt. #2=$15,827; Alt. #2 is the more economical choice.)