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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F03d22bc9-86de-4c1e-90c9-dfcd6dbafd66%2Ff3dd81a4-9d18-4519-99a0-97a2141721b4%2Fwr9dyo_processed.png&w=3840&q=75)
Transcribed Image Text: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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