Compare the following alternatives on the basis oftheir capitalized costs at i= 8% per year and selectthe best alternative.AlternativeAlternative 1 Alternative 2First Cost$230040- $705369AOC, per year - $16345- $10096Salvage Value $31032$149186Life, yearsSelect one:a. Alternative 1 is selected, CC of selectedalternative is $-773451b. Alternative 2 is selected, CC of selectedalternative is $-773451c. Alternative 2 is selected, CC of selectedalternative is $-704506d. Alternative 2 is selected, CC of selectedalternative is $-706456e. Alternative 1 is selected, CC of selectedalternative is $-704506

Salvage value is the estimated resale value of an asset at the end of its useful life. It is…

Answered: Compare the following alternatives on…

Compare the following alternatives on the basis c heir capitalized costs at i= 8% per year and selec he best alternative. Alternative Alternative 1 Alternative 2

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

Compare the following alternatives on the basis of
their capitalized costs at i= 8% per year and select
the best alternative.
Alternative
Alternative 1 Alternative 2
First Cost
$230040
- $705369
AOC, per year - $16345
- $10096
Salvage Value $31032
$149186
Life, years
Select one:
a. Alternative 1 is selected, CC of selected
alternative is $-773451
b. Alternative 2 is selected, CC of selected
alternative is $-773451
c. Alternative 2 is selected, CC of selected
alternative is $-704506
d. Alternative 2 is selected, CC of selected
alternative is $-706456
e. Alternative 1 is selected, CC of selected
alternative is $-704506

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