Alex needs to replace heater for his business, and he is considering the following options. Use MARR=8%.

	Heater A Electric powered	Heater B Gas powered	Heater C Solar powered
Initial Cost	$4500	$5000	$7000
Annual operating cost	$800	$700	$500
Salvage Value	$1000	$800	$1500
Useful Life	6	8	12

Question a:

When the useful lives of alternatives differ, we should use _____ of their useful lives

Least common multiple

Greatest common divisor

An analysis period that is equal to any of the alternatives lives

The longest period from the alternatives

Question b:

Based on your answer in part a, what would be the analysis period we would need to for this problem?

Question c:

What is the PW for Heater B using the useful life you calculated in part b? Round to the nearest integer.

Question d:

The do nothing alternative is a viable option in this problem.

True

False

Question e:

Which heater should be purchased?

Heater A

Heater B

Heater C

None of the heaters should be purchased