Question:

(Ch9) You are faced with a choice between Options A or B below. Each option has a first

cost and one revenue at the end of its life. Assume that both alternatives may be replaced at

the end of their useful lives. For the analysis, you will be using a MARR of 8%. (3 pts.)

(a) Compare each alternative's PW with a 10 year horizon.

(b) Compare each alternative's EAW.

Year / Option A

0 / -$10,000

5 +$24,880

Life,Years / 5

Year Option B

0 / -$10,000

10 / +$40,455

Life,Years / 10

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