In comparing alternatives, I and J by the present worth method, the equation that yields the present worth of alternative I is: Alternative I Alternative J Initial cost, $ -150,000 -250,000 Annual income, $ per year 24 20,000 40,000 Annual expenses, $ per year Salvage value, $ Life, years -9,000 -14,000 25,000 35,000 The interest rate is 15% per year. a) PW I=-150,000+11,000(P/A,15%,3)+25,000*(P/F,15%,3) O b) PW I=-150,000+11,000(P/A,15%,6)+175,000* (P/F,15%,3)+25,000(P/F,15%,6) c) PW I=-150,000+11,000(P/A,15%,6)-125,000*(P/F,15%,3)+25,000(P/F,5%,6) O d) PW I=-150,000+11,000(P/A,15%,6)+25,000*(P/F,15%,6)
In comparing alternatives, I and J by the present worth method, the equation that yields the present worth of alternative I is: Alternative I Alternative J Initial cost, $ -150,000 -250,000 Annual income, $ per year 24 20,000 40,000 Annual expenses, $ per year Salvage value, $ Life, years -9,000 -14,000 25,000 35,000 The interest rate is 15% per year. a) PW I=-150,000+11,000(P/A,15%,3)+25,000*(P/F,15%,3) O b) PW I=-150,000+11,000(P/A,15%,6)+175,000* (P/F,15%,3)+25,000(P/F,15%,6) c) PW I=-150,000+11,000(P/A,15%,6)-125,000*(P/F,15%,3)+25,000(P/F,5%,6) O d) PW I=-150,000+11,000(P/A,15%,6)+25,000*(P/F,15%,6)
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
Problem 1PS
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Can some one please help me to answer each question correctly? please and thank you.
Transcribed Image Text:In comparing alternatives, I and J by the present worth method, the equation that
yields the present worth of alternative I is:
Alternative I
Alternative J
Initial cost, $
- 150,000
- 250,000
Annual income, $ per year
2$
20,000
40,000
Annual expenses, $ per year
2$4
-9,000
-14,000
Salvage value, $
Life, years
25,000
35,000
The interest rate is 15% per year.
a) PW I=-150,000+11,000(P/A,15%,3)+25,000*(P/F,15%,3)
O b) PW I=-150,000+11,000(P/A,15%,6)+175,000*
(P/F,15%,3)+25,000(P/F,15%,6)
Oc) PW I=-150,000+11,000(P/A,15%,6)-125,000(P/F,15%,3)+25,000(P/F,5%,6)
O d) PW I=-150,000+11,000(P/A,15%,6)+25,000*(P/F,15%,6)
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