Questions: A.) Future worth of Alternative A, B, C & DB.) Using the future worth method, which Alternative should be chosen?C.) Annual worth of Alternative A, B, C, & DD.) Using Annual worth method, which alternative should be chosen? When lives are equal adjustments to cash flows are not required. TheMEAS can be compared by directly comparing their equivalent worth(PW, FW, AW) calculated using the MARR. The decision will be thesame regardless of the equivalent worth method you use. For a MARRof 12%, select from among the MEAs below.Capital investmentAnnual revenuesAnnual expensesMarket Value (EOL)Life (years)AlternativesAB-$150.000 -$85,000 $75,000-$120.000$28,000$16,000-$1,000-$550$20,000$10,0001010с$15,000-$500$6,00010D$22,000-$700$11,00010

We have given the alternative with equal service life so there is no need to make any adjustment in…

Answered: When lives are equal adjustments to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Questions: A.) Future worth of Alternative A, B, C & D B.) Using the future worth method, which Alternative should be chosen? C.) Annual worth of Alternative A, B, C, & D D.) Using Annual worth method, which alternative should be chosen?

When lives are equal adjustments to cash flows are not required. The
MEAS can be compared by directly comparing their equivalent worth
(PW, FW, AW) calculated using the MARR. The decision will be the
same regardless of the equivalent worth method you use. For a MARR
of 12%, select from among the MEAs below.
Capital investment
Annual revenues
Annual expenses
Market Value (EOL)
Life (years)
Alternatives
A
B
-$150.000 -$85,000 $75,000-$120.000
$28,000
$16,000
-$1,000
-$550
$20,000
$10,000
10
10
с
$15,000
-$500
$6,000
10
D
$22,000
-$700
$11,000
10

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