### Question 1: Using AW Method to Compare Alternatives**Instructions:** Compare the following alternatives using the Annual Worth (AW) method.| Alt. | F.C. | Operating and Maintenance | Income at the End of 2nd Year | Annual Income | S.V. | Useful Life | i ||------|--------|---------------------------|-------------------------------|---------------|-------|-------------|----|| A | 35000 | 0 | 3500 | 2800 | 7000 | 8 | 8% || B | 32000 | 1500 | 4700 | 2500 | 0 | ∞ | 8% |**Explanation:**- **F.C.**: Fixed Cost for the alternative.- **Operating and Maintenance**: Cost associated with operating and maintaining the alternative.- **Income at the End of 2nd Year**: Expected income generated at the end of the second year.- **Annual Income**: Regular income generated annually.- **S.V. (Salvage Value)**: Value at the end of the useful life span.- **Useful Life**: Duration the alternative is expected to be in use.- **i**: Interest rate.This table presents data for evaluating two alternatives, A and B, to determine which option may be more financially advantageous over its useful life using an interest rate of 8%.

here we calculate the Annual worth of the both alternatives and compare the both which one of the…

Q1) Using AW method compare between the following alternatives. Operating and maintenance Alt. F.C. Income at the Annual nd S.V. Useful life i. end of 2 year Income 35000 3500 2800 7000 8 8% 32000 1500 4700 2500 8% 00

Q1) Using AW method compare between the following alternatives. Operating and maintenance Alt. F.C. Income at the Annual nd S.V. Useful life i. end of 2 year Income 35000 3500 2800 7000 8 8% 32000 1500 4700 2500 8% 00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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