Evaluation of Alternatives at i=10% per year A B First Cost (S) Annual O&M ($/year) Major Repair ($) 0 10,000 18,000 5,000 4,000 2,000 after 5 years of operation 40,000 2,000 5,000 after 10 years of operation 7,800 15 2,000 Annual revenues ($/year) life (years) Salvage (S) 7,200 5 2,000 7,500 10 2,000 Kiezen The Rate of Return (IRR) for alternative B is: 13.7% Kiezen 11.2% 14.5% The Rate of Return (IRR) for alternative C is: Kiezen 12.8% 1 Kiezen 11.2% 8.5% 13.7% Kiezen 12.8 The Modified (B/C) for alternative B, at i=10% per year, is: 8.5% 1.13 Kiezen 6.1% 1.22 1.03 0.95 1.18 Evaluation of Alternatives at i=10% per year A B First Cost (S) Annual O&M ($/year) Major Repair ($) 0 10,000 18,000 5,000 4,000 2,000 after 5 years of operation 40,000 2,000 5,000 after 10 years of operation 7,800 15 2,000 Annual revenues ($/year) life (years) Salvage (S) 7,200 5 2,000 7,500 10 2,000 Kiezen The Rate of Return (IRR) for alternative B is: 13.7% Kiezen 11.2% 14.5% The Rate of Return (IRR) for alternative C is: Kiezen 12.8% 1 Kiezen 11.2% 8.5% 13.7% Kiezen 12.8 The Modified (B/C) for alternative B, at i=10% per year, is: 8.5% 1.13 Kiezen 6.1% 1.22 1.03 0.95 1.18