Complete the following analysis of investment alternatives and select the preferred alternative. The study period is three years and the MARR = 12% per year.Alternative AlternativeAlternativeABCCapital investment$11,100$17,000$12,900Annual revenues4,0006,5005,500Annual costs240500410Market value at EOY 34,9006,2002,750PW (12%)1,419???1,283Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year.

Given; Capital investment= $17000 Annual revenues= $6500 Annual costs= $500 Market value at EOY 3= $6200 i= 12% n= 3 yearsPresent worth of alternative B:- PW=-17000+(6500-500)(P/A, i, n)+6200(P/F, i, n) =-17000+6000(P/A, 12%, 3)+6200(P/F, 12%, 3) =-17000+6000(1+0.12)3-10.12(1+0.12)3+62001(1+0.12)3 =-17000+6000(1.12)3-10.12(1.12)3+62001(1.12)3 =-17000+60002.40183127+62000.711780248 =-17000+14410.9876+4413.0375 =$1824.0251 Alternative B should be selected because its present worth is highest.

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Complete the following analysis of investment alternatives and select the preferred alternative. The study period is three years and the MARR = 12% per year. Alternative Alternative Alternative A C $11,100 4,000 Capital investment $17,000 6,500 $12,900 Annual revenues 5,500 Annual costs 240 500 410 Market value at EOY 3 4,900 6,200 2,750 PW (12%) 1,419 ??? 1,283 Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year.

Complete the following analysis of investment alternatives and select the preferred alternative. The study period is three years and the MARR = 12% per year. Alternative Alternative Alternative A C $11,100 4,000 Capital investment $17,000 6,500 $12,900 Annual revenues 5,500 Annual costs 240 500 410 Market value at EOY 3 4,900 6,200 2,750 PW (12%) 1,419 ??? 1,283 Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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