Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Give reason.

Transcribed Image Text:Three Alternatives
Assume i = 10% per year
A1
A2
Gas Plant
A3
Solar Plant
Electric Plant
First Cost:
Ann. Op. Cost: -700
Sal. Value: +350
Life:
First Cost:
-2500
-3500
First Cost:
-6000
Ann. Op. Cost: -900
Sal. Value: +200
Life:
Ann. Op. Cost: -50
Sal. Value:
+100
5 years
5 years
Life:
5 years
Which Alternative – if any, Should be selected based
upon a present worth analysis?
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