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Help solving with steps 11. Consider the following 3 alternatives: (in $$ millions) A B C Initial cost 50 150 110 Uniform annual benefit 30

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11. Consider the following 3 alternatives: (in $$ millions) A B C Initial cost 50 150 110 Uniform annual benefit 30 45 45 All three alternatives have a useful life of 8 years and the interest rate is 10%. Using only the discounted payback period, which alternative should be selected? 12. A company must make a payment of $350,000 two years from today. How much must the company deposit per quarter in an account that earns 4% interest every quarter so that it has $350,000 at the end of 2 years? (Hint: interest rate is already given as per quarter). 13. A company is considering investing in an energy efficient project. The most likely value of annual savings is $30,000. The optimistic estimate of annual savings is $40,000 and has a probability of 0.25. The pessimistic estimate is $20,000 and has a probability of 0.35. (a) What is the probability of the most likely estimate occurring? (b) What is the expected value for the annual savings? 14. Compute the future worth of the following cashflows, if interest rate is 6.5%. N CF 0 -5000 1 1000 2 1475 3 2700 4 2585 5 3150

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