2. Use the PW method to considered these three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions you make in your analysis. Which alternative should be chosen? Capital investment Annual revenue less expenses Useful life (years) A -$2,000 600 5 B -$8,000 2,200 5 C -$20,000 3,600 10

2. Use the PW method to considered these three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions you make in your analysis. Which alternative should be chosen? Capital investment Annual revenue less expenses Useful life (years) A -$2,000 600 5 B -$8,000 2,200 5 C -$20,000 3,600 10

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

2. Use the PW method to considered these three small mutually exclusive
investment alternatives in the table below. The feasible alternative chosen
must provide service for a 10-year period. The MARR is 12% per year, and the
market value of each is 0 at the end of useful life. State all assumptions you
make in your analysis. Which alternative should be chosen?
Capital investment
Annual revenue less expenses
Useful life (years)
A
-$2,000
600
5
B
-$8,000
2,200
5
C
-$20,000
3,600
10

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