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Alternatives A and B are being evaluated. The effective annual rate is 10%. Alternative A $80,000 20 Years $1,000 Initial Cost Lifetime Annual operations and
Alternatives A and B are being evaluated. The effective annual rate is 10%. Alternative A $80,000 20 Years $1,000 Initial Cost Lifetime Annual operations and maintenance cost Annual benefit Salvage Value Alternative B $35,000 10 Years $3,000 $0 $7,000 $1,000 $0 a) Calculate Cost and Benefit for both alternatives (you need to calculate all items based on their present value. i.e. calculate P/A, P/F, etc. if needed) b) Calculate B/C ratio and choose the best option based on that
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