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
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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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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