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Compare the alternatives shown below using an interest rate of 10% per year. A B Fist cost, $ 22,500 31,200 Annul operating cost, $ per
Compare the alternatives shown below using an interest rate of 10% per year.
| A | B |
Fist cost, $ | 22,500 | 31,200 |
Annul operating cost, $ per year | 3,850 | 2,540 |
Salvage value, $ | 3,250 | 1,300 |
Life, years | 4 | 12 |
Draw the cash flow diagrams. Always use factor notation.
Show all your calculations and explain every step.
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