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N Alia wants to open up a sandwich shop in Amman. She collects data on the initial cost, operating and maintenance cost, yearly benefit (revenue
N Alia wants to open up a sandwich shop in Amman. She collects data on the initial cost, operating and maintenance cost, yearly benefit (revenue from sandwich sales), and salvage value of the equipment she buys for the sandwich shop when she closes down the business in 5 years. Determine the best alternative using the annual cash flow analysis method for an interest rate of 8%. Do nothing is a possible alternative. First Cost Benefit per year O&M annual cost Salvage Value Life in years 5 (35 Points) Alt A Alt B $45,000 $25,000 $10,000 $4,000 $18,000 $13,000 $3,000 $6,000 Alt C $20,000 $1,900 $9,000 $4,600 Alt A First Cost $45,000 Benefit per year $10,000 Operations and $18,000 maintenance cost Salvage Value $3,000 Life in years 5 Alt B $25,000 $4,000 $13,000 Alt C $20,000 $1,900 $9,000 $6,000 $4,600
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