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Consider the following EOY cash flows for two mutually exclusive alternatives(one must be chosen): Alternative A Alternative B Capital Investment 9000 15000 Annual Expenses 2000
Consider the following EOY cash flows for two mutually exclusive alternatives(one must be chosen):
Alternative A | Alternative B | |
Capital Investment | 9000 | 15000 |
Annual Expenses | 2000 | 2000 |
Useful Life(years) | 3 | 8 |
Market value at the end of the useful life | 2100 | 2300 |
The MARR is 8% per year.
a)Determine which alternative should be selected if the repeatability assumption applies.Use PW in your analysis.
PW for A(PWA) | ? |
PW for B(PWB) | ? |
Which one is preferred? |
b)Determine which alternative should be selected if the analysis period is 8 years and the repeatability assumpiton does not apply.Use the AW method.
AW for A(AWA) | ? |
AW for B(AWB) | ? |
Which one is preferred? |
PLEASE SOLVE BOTH CHOICE ( a and b)
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