a. If the evaluation of the two alternatives is performed on a present worth basis, what will be the PW for alternative 2? b. Calculate the FW of alternative 2 when performing a future worth evaluation over a study period of 8 years.

FORMULATING ALTERNATIVES & DECISION MAKING ANNUAL WORTH ANALYSIS Problems 1 through 4 utilize the following estimates Costs are shown with a minus sign, and the MARR is 12% per year. Alternative 1 Alternative 2 First cost, $ Annual cost, $ per year Salvage value, $ - 40.000 - 20,000 10,000 -65,000 -15,000 25,000 Life, years 3 4