Question
Two renewal energy alternatives are available for providing energy at a remote federal research facility. The cash flow estimates associated with each alternative are given
Two renewal energy alternatives are available for providing energy at a remote federal research facility. The cash flow estimates associated with each alternative are given below. Use the conventional B-C ratio method, with AW as the equivalent-worth measure, to determine which alternative should be selected at an interest rate of 14% per year over a 25-year study period. One alternative must be selected. Alternative I Alternative II Initial cost, $ $1,000,000 $990,000 Annual maintenance, $/yr $380,000 $359,500 Annual benefits, $/yr $500,000 $459,500 Salvage value, $ $17,000 $15,800
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