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Two mutually exclusive alternatives of A and B have both useful lives of 5 years. For Alternative A, there is an initial cost of dollar
Two mutually exclusive alternatives of A and B have both useful lives of 5 years. For Alternative A, there is an initial cost of dollar 2, 500 and annual benefits of dollar 746. For Alternative there is an initial cost of dollar 6,000 and annual benefits of dollar I, 664. By following each of the following methods, define which alternative should be chosen? Present Worth Analysis (the interest rate is 8%) Annual Cash Flow Analysis (the interest rate is 8%) Rate of Return Analysis (Minimum Attractive Rate of Return is 8%)
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