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Question 1 10 pts Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis period is 5 years. Assume
Question 1 10 pts Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis period is 5 years. Assume an interest rate of 6% per year, compounded annually Initial Cost Annual Benefit Salvage Value Useful Life (yrs) Alternative A 1900 150 220 5 Alternative B 4440 420 1315 5 Alternative A should be chosen, because its initial cost is lower than Alternative B's Alternative B should be chosen, because its annual benefit is higher than Alternative A's Alternative A should be chosen, because its equivalent annual cost is $138.74 lower than Alternative B's Alternative B should be chosen, because its equivalent annual cost is $138.74 higher than Alternative A's
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