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Consider the following alternatives: a Using the annual cost method, which is the most cost effective alternative? b. Extend Alternate B and compare the two
Consider the following alternatives: a Using the annual cost method, which is the most cost effective alternative? b. Extend Alternate B and compare the two alternatives using their present worths. c. What are the ratios of the two alternatives, using the AC and PW methods? Consider a serial bond issue with the following characteristics: Total bond issue: exist20,000 Number of bonds issued: 100 Term of bonds: 4 years Coupon rate: 3%/year Prepare a complete bond redemption table, Round all values amounts in the table to the nearest dollar. Sum appropriate columns to check your figures. A municipal highway department needs to repave a section of roadway. Concrete would cost exist500,000, and lasts for 20 years. Asphalt can also be used, but it only lasts for 15 years, and requires resealing after 8 years at a cost of exist50,000. At what cost of asphalt would it make sense to pave with that material? Use i = 6%
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