Compare alternatives A and B with the present worth method if the MARR is 14% per year. Which one would you recommend? Assume repeatability and a study period of 12 years. Capital Investment Operating Costs A $50,000 $6,000 at end of year 1 and increasing by $600 per year thereafter Overhaul Costs Life Salvage Value $6,000 every 3 years 12 years $12,000 if just overhauled B $25,000 $12,000 at end of year 1 and increasing by $1,200 per year thereafter None 6 years negligible Click the icon to view the interest and annuity table for discrete compounding when the MARR is 14% per The PW of Alternative A is S (Round to the nearest dollar.) The PW of Alternative B is $. (Round to the nearest dollar.) Alternative A should be selected. 다.
Compare alternatives A and B with the present worth method if the MARR is 14% per year. Which one would you recommend? Assume repeatability and a study period of 12 years. Capital Investment Operating Costs A $50,000 $6,000 at end of year 1 and increasing by $600 per year thereafter Overhaul Costs Life Salvage Value $6,000 every 3 years 12 years $12,000 if just overhauled B $25,000 $12,000 at end of year 1 and increasing by $1,200 per year thereafter None 6 years negligible Click the icon to view the interest and annuity table for discrete compounding when the MARR is 14% per The PW of Alternative A is S (Round to the nearest dollar.) The PW of Alternative B is $. (Round to the nearest dollar.) Alternative A should be selected. 다.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Compare alternatives A and B with the present worth method if the MARR is 14% per year. Which one would
you recommend? Assume repeatability and a study period of 12 years.
Capital Investment
Operating Costs
A
$50,000
$6,000 at end of year 1 and increasing
by $600 per year thereafter
Overhaul Costs
Life
Salvage Value
$6,000 every 3 years
12 years
$12,000 if just overhauled
B
$25,000
$12,000 at end of year 1 and increasing
by $1,200 per year thereafter
None
6 years
negligible
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 14% per
The PW of Alternative A is S
(Round to the nearest dollar.)
The PW of Alternative B is $. (Round to the nearest dollar.)
Alternative A should be selected.
다.
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