Consider the following EOY cash flows for two mutually exclusive altermatives (one must be chosen). The MARR is 6% per year. Lead Acid Lithlum ton $7,000 Capital investment Annual expenses $13,000 $2,500 18 years $3,000 $2,750 12 years Useful life Market value at end of useful life Click the icon to view the interest and annuity table for discrete compounding when i 6% per year. Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 36 years. The PW of the Lead Acid is $. (Round to the nearest hundreds.) The PW of the Lithium lon is $ (Round to the nearest hundreds.)
Consider the following EOY cash flows for two mutually exclusive altermatives (one must be chosen). The MARR is 6% per year. Lead Acid Lithlum ton $7,000 Capital investment Annual expenses $13,000 $2,500 18 years $3,000 $2,750 12 years Useful life Market value at end of useful life Click the icon to view the interest and annuity table for discrete compounding when i 6% per year. Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 36 years. The PW of the Lead Acid is $. (Round to the nearest hundreds.) The PW of the Lithium lon is $ (Round to the nearest hundreds.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Consider the following EOY cash flows for two mutually exclusive altermatives (one must be chosen). The MARR is 6% per year.
Lead Acid
Lithlum lon
Capital investment
Annual expenses
$7,000
$2,750
12 years
$0
$13,000
$2,500
18 years
$3,000
Useful life
Market value at end of useful life
Click the icon to view the interest and annuity table for discrete compounding when i= 6% per year.
Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 36 years.
The PW of the Lead Acid is $ (Round to the nearest hundreds.)
The PW of the Lithium lon is $. (Round to the nearest hundreds.)
Which alternative should be selected? Choose the correct answer below.
O ithium lon
Lead Acid
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