An economic evaluation of the following mutually exclusive alternatives is being conducted. Since they have different service​ lives, repeatability is assumed and an analysis period of 18 years is used. The MARR is 12​%.                   Alternative A Alternative B Initial cost ​$40,000 ​$120,000 Annual revenues ​$25,000 ​$40,000 Service life​ (years) 6 9 Answer the following two​ questions: ​(1) The net AW of Alternative A over the analysis period is​ (select the closest​ value)   A.​$34,729 B.​$19,483 C.​$8,448 D.​$15,271 ​(2) The net PW of Alternative A over the analysis period is​ (select the closest​ value) A.​$61,242 B.​$141,242 C.​$110,710 D.​$62,785

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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An economic evaluation of the following mutually exclusive alternatives is being conducted. Since they have different service​ lives, repeatability is assumed and an analysis period of 18 years is used. The MARR is

12​%.                

 

Alternative A

Alternative B

Initial cost

​$40,000

​$120,000

Annual revenues

​$25,000

​$40,000

Service life​ (years)

6

9

Answer the following two​ questions:

​(1) The net AW of Alternative A over the analysis period is​ (select the closest​ value)

 

A.​$34,729

B.​$19,483

C.​$8,448

D.​$15,271

​(2) The net PW of Alternative A over the analysis period is​ (select the closest​ value)

A.​$61,242

B.​$141,242

C.​$110,710

D.​$62,785

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