Given the following two alternatives and using the repeatabilityassumption and MARR=15%/year, the equation for computing thepresent worth of vendor B isVendor AFirst Cost, $-15,000Annual cost, $ per year -3500Salvage Value, $1000Life, years3Vendor B-18000-310020004OPW=18000-18000(P/F,15%, 4)-18000(P/F,15%, 8)+2000(P/F, 15%,4)+2000(P/F, 15%, 8) +2000 (P/F, 15%, 12)-3100(P/A, 15%, 12)PW=18000-18000(P/F, 15%, 12)+2000(P/F, 15%, 4)+2000 (P/F, 15%,8)+2000(P/F, 15%, 12)-3100(P/A, 15%, 12)O PW=-18000-18000(P/F,15%, 4) - 18000(P/F,15%, 8) +2000(P/F, 15%,4)+2000(P/F, 15%, 8) +2000 (P/F, 15%, 12)-3100(P/A, 15%, 12)O PW=-18000(P/F,15%, 4) -18000(P/F,15%, 8) +2000(P/F, 15%, 4)+2000(P/F,15%, 8) +2000(P/F, 15%, 12)-3100(P/A, 15%, 12)

Present Worth refers to the value that a certain investment or scheme in the future has at present due to its discounting using the prevailing or specified interest rate. It is used to compare different investment alternatives by investors to determine which alternative is more profitable.For Vendor B:First Cost, Annual Cost, Salvage Value, Life, As there is repeatability, the cycle of investment repeats. So, the salvage value will come in multiples of 4 years which are 4 years, 8 years, and 12 years. Similarly, the first cost will come in multiples of 4 years which are 4 years, 8 years, and 12 years. The annual cost will be used with the present value of the annuity formula for a duration of 12 years.The interest rate given is 15%.Present Value of the first cost in the first year is -$18,000.Present Value of the first cost in the fourth year is .Present Value of the first cost in the eighth year is .Present Value of the salvage value in the fourth year is .Present Value of the salvage value in the eighth year is .Present Value of the salvage value in the twelfth year is .The present value of annuity for the total of 12 years is So, the net present value of Vendor B is:The present worth of vendor B is calculated using: