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 10%. Initial cost Annual revenues Service life (years) Alternative A $30,000 $25,000 6 Alternative B $100,000 $40,000 9 Answer the following two questions: (1) The net AW of Alternative B over the analysis period is (select the closest value) A. $15,614 B. $27,807 C. $22,636 D. $57,364 (2) The net PW of Alternative B over the analysis period is (select the closest value) A. $228,056 B. $185,647 C. $130,361 D. $128,056

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 10%. Initial cost Annual revenues Service life (years) Alternative A $30,000 $25,000 6 Alternative B $100,000 $40,000 9 Answer the following two questions: (1) The net AW of Alternative B over the analysis period is (select the closest value) A. $15,614 B. $27,807 C. $22,636 D. $57,364 (2) The net PW of Alternative B over the analysis period is (select the closest value) A. $228,056 B. $185,647 C. $130,361 D. $128,056

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 10%.
Initial cost
Annual revenues
Service life (years)
Alternative A
$30,000
$25,000
6
Alternative B
$100,000
$40,000
9
Answer the following two questions:
(1) The net AW of Alternative B over the analysis period is (select the closest value)
A. $15,614
B. $27,807
C. $22,636
D. $57,364
(2) The net PW of Alternative B over the analysis period is (select the closest value)
A. $228,056
B. $185,647
C. $130,361
D. $128,056

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