Consider the following alternatives: Initial cost $10,000 $15,000 $20,000 Uniform annual 1000 1762 5548 benefit Useful life (years) Infinite 20 5 Alternatives B and C are replaced at the end of their useful lives with identical replacements. Use an infinite analysis period.

Consider the following alternatives: Initial cost $10,000 $15,000 $20,000 Uniform annual 1000 1762 5548 benefit Useful life (years) Infinite 20 5 Alternatives B and C are replaced at the end of their useful lives with identical replacements. Use an infinite analysis period.

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

(a) Construct a choice table for interest rates from
0% to 100%.
(b) At an 8% interest rate, which alternative is
better?

Consider the following alternatives:
A
B
C
Initial cost
$10,000 $15,000 $20,000
Uniform annual
1000
1762
5548
benefit
Useful life (years) Infinite
20
5
Alternatives B and C are replaced at the end of
their useful lives with identical replacements. Use an
infinite analysis period.

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