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A B First Cost $57,000 $86,000 Annual benefits $8,900 $10,700 Annual O&M $1,500 $1,650 Salvage value $10,000 $14,000 Useful, life 6 12 Answer the following:

A

B

First Cost

$57,000

$86,000

Annual benefits

$8,900

$10,700

Annual O&M

$1,500

$1,650

Salvage value

$10,000

$14,000

Useful, life

6

12

Answer the following:

Draw a cash flow diagrams for the two alternatives.

You must create two tables in excel to represent the two alternatives per year:

find a total by year

find the Present worth of each alternative (first cost + npv (rate,all the totals per year))

Draw a diagram of each alternative per year based on the first cost, annual benefits, operating and maintenance, salvage value.

Based on the diagram that you created, you can start by making and report a decision of each alternative. Explain!

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