1. Consider two mutually exclusive investment projects: A 1 and A2. Each project has the same service life, and the present worth of each component value (B, I, and C) is computed at 10% as follows: Project Al: B=$8000, I-$3500, C-$2000 and Project A2: B-$18000, I-$11,000, C-$4000 Which project would be the best alternative based on PI index?

1. Consider two mutually exclusive investment projects: A 1 and A2. Each project has the same service life, and the present worth of each component value (B, I, and C) is computed at 10% as follows: Project Al: B=$8000, I-$3500, C-$2000 and Project A2: B-$18000, I-$11,000, C-$4000 Which project would be the best alternative based on PI index?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Consider two mutually exclusive investment projects: A 1 and A2. Each project has
the same service life, and the present worth of each component value (B, I, and C') is
computed at 10% as follows:
Project Al: B=$8000, I-$3500, C-$2000 and
Project A2: B=$18000, I- $11,000, C'-$4000
Which project would be the best alternative based on PI index?

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