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Consider the following alternatives: Alternative 1 Alternative 2 Cost $2,200 $12,500 Uniform annual benefit 500 4,000 Useful life, in years 8 4 Interest rate %
Consider the following alternatives:
Alternative 1 Alternative 2
Cost $2,200 $12,500
Uniform annual benefit 500 4,000
Useful life, in years 8 4
Interest rate % 10 10
The analysis period is 8 years. Assume Alternative 2 will not be replaced after 4 years. Which alternative should be selected? You must use an annual cash flow analysis.
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