Consider these two alternatives.

a. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial decision based on these data would bereversed? The annual MARR is

12%

per year.

b. Determine the life of Alternative 1 for which the AWs are equal.

Consider these two alternatives. Alternative 1 Alternative 2 Capital investment $4, 100 56,200 Annual revenues $1,600 $1,950 Annual expenses $370 $490 Estimated market value $650 $1,200 Useful life 6 years 7 years a. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial decision based on these data would be reversed? The annual MARR is 12% per year. b. Determine the life of Alternative 1 for which the AWs are equal. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. The capital investment of Alternative 2 would have to be $ or less for the initial decision to be reversed. (Round to the nearest dollar.) b. The life of Alternative 1 for which the AWs are equal is years. (Round to one decimal place.)More Info - X Discrete Compounding; i = 12% Single Payment Uniform Series Compound Compound Sinking Capital Amount Present Amount Present Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P 2 FIP PIF FIA PIA AIF AIP 1. 1200 0.8929 1.0000 0.8929 1.0000 1.1200 1.2544 0.7972 2.1200 1.6901 0.4717 0.5917 1.4049 0.7118 3.3744 2.4018 0.2963 0.4163 1.5735 0.6355 4.7793 3.0373 0.2092 0.3292 DOYOUAWN- 1.7623 0.5674 6.3528 3.6048 0.1574 0.2774 1.9738 0.5066 8. 1152 4.1114 0.1232 0.2432 2.2107 0.4523 10.0890 4.5638 0.0991 0.2191 2.4760 0.4039 12.2997 4.9676 0.0813 0.2013 2.7731 0.3606 14.7757 5.3282 0.0677 0.1877 10 3.1058 0.3220 17.5487 5.6502 0.0570 0.1770 11 3.4785 0.2875 20.6546 5.9377 0.0484 0.1684 12 3.8960 0.2567 24.1331 6.1944 0.0414 0. 1614 13 4.3635 0.2292 28.0291 6.4235 0.0357 0.1557 14 4.8871 0.2046 32.3926 6.6282 0.0309 0. 1509 15 5.4736 0.1827 37.2797 6.8109 0.0268 0.1468 Print Done