Assume an interest rate of 9% per year, compounded annually. Alternative A 4,000 800 infinite Initial Cost Annual Benefit Useful Life (yrs) Alternative B 2,300 1,627 16 Alternative C 8,000 3,027 8 Alternatives B and C are replaced at the end of their useful lives with identical replacements. Using present worth analysis, find the best alternative. Choose Alternative C because its net present worth is $2,566.24 more than its nearest competitor Choose Alternative A because its net present worth is postive Choose Alternative A because it lasts the longest Choose Alterntive C because it has the highest annual benefit
Assume an interest rate of 9% per year, compounded annually. Alternative A 4,000 800 infinite Initial Cost Annual Benefit Useful Life (yrs) Alternative B 2,300 1,627 16 Alternative C 8,000 3,027 8 Alternatives B and C are replaced at the end of their useful lives with identical replacements. Using present worth analysis, find the best alternative. Choose Alternative C because its net present worth is $2,566.24 more than its nearest competitor Choose Alternative A because its net present worth is postive Choose Alternative A because it lasts the longest Choose Alterntive C because it has the highest annual benefit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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