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Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 12% per year and a study period of 8 years. Alternative First Cost Annual Operating Cost Overhaul in Year 4 Salvage Value Life A $-30,000 $-5,000 $-3,000 $6,000 8 years B $-17,000 $-4,000 $0 $3,400 4 years

Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 12% per year and a study period of 8 years. Alternative First Cost Annual Operating Cost Overhaul in Year 4 Salvage Value Life A $-30,000 $-5,000 $-3,000 $6,000 8 years B $-17,000 $-4,000 $0 $3,400 4 years

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 12% per year and a study period of 8 years. Alternative First Cost Annual Operating Cost Overhaul in Year 4 Salvage Value Life A $-30,000 $-5,000 $-3,000 $6,000 8 years B $-17,000 $-4,000 $0 $3,400 4 years
Transcribed Image Text:Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 12% per year and a study period of 8 years. Alternative First Cost Annual Operating Cost Overhaul in Year 4 Salvage Value Life A $-30,000 $-5,000 $-3,000 $6,000 8 years B $-17,000 $-4,000 $0 $3,400 4 years
A B D Alternative A: $-65,410 Alternative B: $-71,874 Alternative Ais selected Alternative A: $-54,321 Alternative B: $-44,410 Alternative Bis selected Alternative A: $-77,722 Alternative B: $-121,116 Alternative Ais selected Alternative A: $-89,770 Alternative B: $-66,120 Alternative Bis selected
Transcribed Image Text:A B D Alternative A: $-65,410 Alternative B: $-71,874 Alternative Ais selected Alternative A: $-54,321 Alternative B: $-44,410 Alternative Bis selected Alternative A: $-77,722 Alternative B: $-121,116 Alternative Ais selected Alternative A: $-89,770 Alternative B: $-66,120 Alternative Bis selected
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