Question
A city is planning to invest in potential projects with the estimated cash flows below. Given that interest rates is 4.88808848% per semiannual, determine which
A city is planning to invest in potential projects with the estimated cash flows below. Given that interest rates is 4.88808848% per semiannual, determine which option(s) is preferable if options are mutually exclusive and independent. Please show work using present worth analysis
| Alternative H | Alternative G |
First cost ($) | -150,000 | -800,000 |
Annual operating Cost($/yr) | -50,000 | -12,000 |
Salvage Value($) | 8,000 | 1,000,000 |
Life (years) | 5 | 7 |
A.) Find mutually exclusive and independent if Alternative G has 10 years life time.
B.) Find mutually exclusive and independent if Alternative G has life time of infinity.
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