What is the Present worth difference of Alternative A and B. Capital investment Annual Cash inflow Life in years Salvage value Interest is 10% per year O a. 1452 O b. 1234 O c. 998 O d. 1106 Alternative A 3500 1255 4 0 B 5000 1480 6 0

What is the Present worth difference of Alternative A and B. Capital investment Annual Cash inflow Life in years Salvage value Interest is 10% per year O a. 1452 O b. 1234 O c. 998 O d. 1106 Alternative A 3500 1255 4 0 B 5000 1480 6 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

What is the Present worth difference of Alternative A and
B.
Capital investment
Annual Cash inflow
Life in years
Salvage value
Interest is 10% per year
O a. 1452
O b. 1234
OC. 998
O d. 1106
Alternative
A
3500
1255
4
0
B
5000
1480
6
0

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Step 1: Introduction:

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Step 2: Cash flow diagrams:

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Step 3: Present worth of alternative A:

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Step 4: Determine the present worth of alternative B:

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Step 5: Determine the difference between present worth of A and B:

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