A company must invest in one of two alternatives. Alternative A Alternative B Initial Cost $712,623 $752,357 Annual Saving $5,901 $8,032 Annual Costs $33,823 $14,608 Cost Increase (starting Y2) $196 $823 Salvage $8,282 $1,057 MARR = 3.38% per compounding period %3D Investment period = 11, compounded yearly If they perform an annual worth analysis, what is the value of the best alternative?
A company must invest in one of two alternatives. Alternative A Alternative B Initial Cost $712,623 $752,357 Annual Saving $5,901 $8,032 Annual Costs $33,823 $14,608 Cost Increase (starting Y2) $196 $823 Salvage $8,282 $1,057 MARR = 3.38% per compounding period %3D Investment period = 11, compounded yearly If they perform an annual worth analysis, what is the value of the best alternative?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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