5. Which of the following is true regarding the two mutually exclusive alternatives below ifMARR is set to be 10% (project repeatability can be assumed)?Alternative A Alternative B$120,000$12,000Initial Cost$95,000Annual O&M Costs $3,000$15,000$28,000Salvage ValueUseful life (years)36.a. The AEC of Alternative A is approximately $3,699b. Alternative B should not be chosen since it has a lower AEC over its lifec. The capital recovery cost of Alternative B is approximately $23,924d. Alternative A should be chosen since it has lower annual O&M costs

5. Which of the following is true regarding the two mutually exclusive alternatives below if MARR is set to be 10% (project repeatability can be assumed)? Alternative AAlternative B Initial Cost $95,000 $120,000 Annual O&M Costs $3,000 $12,000 $15,000 Salvage Value Useful life (years) $28,000 3 a. The AEC of Alternative A is approximately $33,699 b. Alternative B should not be chosen since it has a lower AEC over its life c. The capital recovery cost of Alternative B is approximately $23,924 d. Alternative A should be chosen since it has lower annual O&M costs

5. Which of the following is true regarding the two mutually exclusive alternatives below if MARR is set to be 10% (project repeatability can be assumed)? Alternative AAlternative B Initial Cost $95,000 $120,000 Annual O&M Costs $3,000 $12,000 $15,000 Salvage Value Useful life (years) $28,000 3 a. The AEC of Alternative A is approximately $33,699 b. Alternative B should not be chosen since it has a lower AEC over its life c. The capital recovery cost of Alternative B is approximately $23,924 d. Alternative A should be chosen since it has lower annual O&M costs

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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