9-54 Three mutually exclusive alternatives are being A considered: Initial cost Benefit at end of the first year Uniform benefit at end of subsequent years Useful life, in years A B $500 $400 200 200 100 6 125 5 C $300 200 (a) Based on the payback period? (b) Based on benefit-cost ratio analysis? 100 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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9-54 Three mutually exclusive alternatives are being
A
considered:
Initial cost
Benefit at end of the first
year
Uniform benefit at end of
subsequent years
Useful life, in years
A
$500
200
1
100
6
B
$400
200
125
5
(a) Based on the payback period?
(b) Based on benefit-cost ratio analysis?
C
$300
200
100
4
At the end of its useful life, an alternative is not
replaced. If the MARR is 10%, which alternative
should be selected
Transcribed Image Text:9-54 Three mutually exclusive alternatives are being A considered: Initial cost Benefit at end of the first year Uniform benefit at end of subsequent years Useful life, in years A $500 200 1 100 6 B $400 200 125 5 (a) Based on the payback period? (b) Based on benefit-cost ratio analysis? C $300 200 100 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected
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