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Compare the options shown below on basis of their Equivalent Uniform Annual Worth. Use an interest rate of an effective 12% per year, compounded quarterly
Compare the options shown below on basis of their Equivalent Uniform Annual Worth. Use an interest rate of an effective 12% per year, compounded quarterly and draw the a respective Cash Flow Diagram. Carryout the decimal form of interest rates to 4 decimal places, and interest factors to 5 decimal places.
Option A | Option B | |
First Cost | $200 000 | $800 000 |
Annual Operating Cost | $65 000 | $9 000 |
Salvage Value | $6 000 | $1 000 000 |
Life, years | 4 | infinity |
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