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Q2) consider the following four alternatives as shown in the table. one of the four alternatives is do nothing alternative. if the alternatives are evaluated at an interest rate of 8%, Which alternative would you choose using a) the NPW analysis, b) EAU -Analysis (Equivalent annual uniform analysis) Initial Cost O&M costs Annual benefit Salvage value Life, in years A B Do nothing C $500 $600 0 $700 20 15 0 22 135 100 0 100 0 250 0 180 5 5 0 10

Q2) consider the following four alternatives as shown in the table. one of the four alternatives is do nothing alternative. if the alternatives are evaluated at an interest rate of 8%, Which alternative would you choose using a) the NPW analysis, b) EAU -Analysis (Equivalent annual uniform analysis) Initial Cost O&M costs Annual benefit Salvage value Life, in years A B Do nothing C $500 $600 0 $700 20 15 0 22 135 100 0 100 0 250 0 180 5 5 0 10

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: The Basic Tools Of Finance
Section: Chapter Questions
Problem 3CQQ
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Q2) consider the following four alternatives as shown in the table. one of the four alternatives is do nothing alternative. if the alternatives are evaluated at an interest rate of 8%, Which alternative would you choose using a) the NPW analysis, b) EAU -Analysis (Equivalent annual uniform analysis) Initial Cost O&M costs Annual benefit Salvage value Life, in years A B Do nothing C $500 $600 0 $700 20 15 0 22 135 100 0 100 0 250 0 180 5 5 0 10
Transcribed Image Text:Q2) consider the following four alternatives as shown in the table. one of the four alternatives is do nothing alternative. if the alternatives are evaluated at an interest rate of 8%, Which alternative would you choose using a) the NPW analysis, b) EAU -Analysis (Equivalent annual uniform analysis) Initial Cost O&M costs Annual benefit Salvage value Life, in years A B Do nothing C $500 $600 0 $700 20 15 0 22 135 100 0 100 0 250 0 180 5 5 0 10
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