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5. Problem 5 A cost analysis is to be made to determine what, if anything, should be done in a situation offering three do-something and
5. Problem 5 A cost analysis is to be made to determine what, if anything, should be done in a situation offering three \"do-something\" and one \"do-nothing\" alternatives. Estimates of the cost and benets are as follows: Alternatives Cost ($) Uniform Annual End-of-UsefulLife Useful Life (years) Benefit $ Salve Value $ _- 700 100 180 10 0 0 0 0 Use a 10-year analysis period for the four mutually exclusive alternatives. At the end of ve years, Alternatives 1 and 2 may be replaced with identical alternatives (with the same cost, benets, salvage value, and useful life). (a) If an 8% interest rate is used, which alternative should be chosen? (b) If a 12% interest rate is used, which alternative should be chosen
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