4. Compare the alternatives shown below on the basis of a present worth analysis, using an interest rate of 5% per year. (hand calculation Alternative P Alternative Q First Cost, $ -24,000 -32,000 Annual Operating cost, $ /year -3,200 -2,500 Salvage Value, $ 3,000 1,000 Life years 3 6. You should consider Least Common Multiple of (3 and 6) which is 6 years in your analysis instead of 3 years!
4. Compare the alternatives shown below on the basis of a present worth analysis, using an interest rate of 5% per year. (hand calculation Alternative P Alternative Q First Cost, $ -24,000 -32,000 Annual Operating cost, $ /year -3,200 -2,500 Salvage Value, $ 3,000 1,000 Life years 3 6. You should consider Least Common Multiple of (3 and 6) which is 6 years in your analysis instead of 3 years!
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Can someone please solve this question using hand calculations only? PLEASE AND THANK YOU!!!
Transcribed Image Text:4. Compare the alternatives shown below on the basis of a present worth analysis, using an
interest rate of 5% per year.
(hand calculation
Alternative P
Alternative Q
First Cost, $
Annual Operating cost, $ /year
-24,000
e 3,200
-32,000
-2,500
Salvage Value, $
Life years
3,000
1,000
3
6.
You should consider Least Common Multiple of (3 and 6) which is 6 years in your analysis
instead of 3 years!
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