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QUESTION 1 Alternative A and Alternative B are being considered for recovering aluminum from garbage. Alternative A - has a capital cost of $100,000, a
QUESTION 1 Alternative A and Alternative B are being considered for recovering aluminum from garbage. Alternative A - has a capital cost of $100,000, a first year maintenance cost of $15,000, with maintenance increasing by $500 per year for each year after the first. Alternative B - has a capital cost of $120,000, a first year maintenance cost of $17,000, with maintenance increasing by $1,000 per year after the first. Revenues from the sale of aluminum are $20,000 in the first year, increasing $2,000 per year for each year after the first. Life of both alternatives is 10 years. There is no salvage value. The before-tax MARR is 10%. Using present worth analysis, determine which alternative is preferred. The present worth of alternative A is and the present worth of alternative B is
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