A company is considering buying a generator to increase its power capacity that will generate extra annual revenue. It needs to choose among 3 alternatives whose details are given below:

It could also choose to continue operating with its current capacity. Assume a MARR of 6% and use this information to solve the following questions.

Alternative	Purchase Price ($)	Additional annual revenue ($)	Useful life (years)	Salvage value ($)
A	5500	700	8	2000
B	5000	500	8	2500
C	7000	700	8	3000

a) What is the Net Present Worth (NPW) of alternative A? Round to the nearest dollar.

b) What is the Net Present Worth (NPW) of alternative B? Round to the nearest dollar

c) What is the Net Present Worth (NPW) of alternative C? Round to the nearest dollar

d) Which alternative should the company pick?

Alternative A

Alternative B

Alternative C

None of the above

The company is indifferent

e) Based on your answer from part a, you can conclude that the Annual Worth (AW) of Alternative A would be _______.

Positive

Negative

here is not enough information to make conclusions about the AW

f) As the MARR increases, these projects become _________ to cost justify

Easier

Harder