An expansion of his business and carrying out a study. Two feasible alternatives are found with different cash flow during 10 years of the useful life of such expansion. The initial investment and estimated revenue for all four alternatives (I and J) are listed in the following table. All numbers are in thousands.

1) Assuming that MARR=12%, rank these alternatives using a) present worth method, b) future worth method, c) annual worth method. Analyze the result obtained using different methods of ranking. ( No Need this Answer )

2) Find IRR of each alternative. Rank alternatives using IRR method (MARR=5%). Compare this ranking with the one in part (1).

3) Rank the alternatives using Benefit-Cost Ratio method (MARR=5%). Compare this ranking with the one in part (2).

Cash flow for two alternatives I and J

	year	I (*1000)	J (*1000)
	0	-1100	-1000
	1	180	0
	2	175	0
	3	170	0
	4	165	0
	5	160	0
	6	155	370
	7	150	370
	8	145	370
	9	140	370
	10	135	370
total, i=0		475	850