Alternative A Alternative B Alternative C Initial cost $60,000 $40,000 $50,000 Annual Benefits $32,000 $16,000 $17,000 Salvage Value $10,000 $9,000 $9,000 Useful life, years 2 3 6 vCash flow diagram for each alternative? ch machine is preferable on the basis of PRESENT WORTH ANALYSIS if i=4% per year?
Alternative A Alternative B Alternative C Initial cost $60,000 $40,000 $50,000 Annual Benefits $32,000 $16,000 $17,000 Salvage Value $10,000 $9,000 $9,000 Useful life, years 2 3 6 vCash flow diagram for each alternative? ch machine is preferable on the basis of PRESENT WORTH ANALYSIS if i=4% per year?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Can someone please help me to solve this problem with neat hand calculations. Please and thank you!!

Transcribed Image Text:A company is investigating three alternatives as follows: Ho
Alternative A
Alternative B
Alternative C
Initial cost
$60,000
$40,000
$50,000
Annual Benefits
$32,000
$16,000
$17,000
Salvage Value
$10,000
$9,000
$9,000
Useful life, years
2
3
6
a) Draw Cash flow diagram for each alternative?
b) Which machine is preferable on the basis of PRESENT WORTH ANALYSIS if i=4% per year?
(Assume the selected alternative will be repeated each life cycle, in exactly the same manner
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