In comparing alternatives I and J by the present worth method, the equation that yields the present worth of alternative J is: Alternative IAlternative J Initial cost, $ -150,000 -250,000 Annual income, $ per year 20,000 40,000 Annual expenses, $ per year -9,000 -14,000 Salvage value, $ 25,000 35,000 Life, years 3 6. The interest rate is 15% per year. a) PW J=-250,000+40,000(P/A,15%,6)+35,000*(P/F,15%,6) b) PW J=-250,000+26,000(P/A,15%,6)+35,000*(P/F,15%,6) c) PW J=-250,000-26,000(P/A,15%,6)+35,000*(P/F,15%,6) d) PW J=-250,000-26,000(P/A,15%,6)-35,000*(P/F,15%,6)

In comparing alternatives I and J by the present worth method, the equation that yields the present worth of alternative J is: Alternative IAlternative J Initial cost, $ -150,000 -250,000 Annual income, $ per year 20,000 40,000 Annual expenses, $ per year -9,000 -14,000 Salvage value, $ 25,000 35,000 Life, years 3 6. The interest rate is 15% per year. a) PW J=-250,000+40,000(P/A,15%,6)+35,000(P/F,15%,6) b) PW J=-250,000+26,000(P/A,15%,6)+35,000(P/F,15%,6) c) PW J=-250,000-26,000(P/A,15%,6)+35,000(P/F,15%,6) d) PW J=-250,000-26,000(P/A,15%,6)-35,000(P/F,15%,6)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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