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Which alternative should be selected? Choose the correct answer below.

Which alternative should be selected? Choose the correct answer below.

Essentials Of Investments
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
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Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen). The MARR is 4% per year. Lead Acid Lithium lon Capital investment Annual expenses $7,000 $2,250 12 years $0 $13,000 $2,500 18 years $2,600 Useful life Market value at end of useful life Click the icon to view the interest and annuity table for discrete compounding when i= 4% per year. Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 36 years. The PW of the Lead Acid is $ - 56600 . (Round to the nearest hundreds.) The PW of the Lithium lon is $ 65400. (Round to the nearest hundreds.) Which alternative should be selected? Choose the correct answer below. Lithium lon Lead Acid
Transcribed Image Text:Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen). The MARR is 4% per year. Lead Acid Lithium lon Capital investment Annual expenses $7,000 $2,250 12 years $0 $13,000 $2,500 18 years $2,600 Useful life Market value at end of useful life Click the icon to view the interest and annuity table for discrete compounding when i= 4% per year. Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 36 years. The PW of the Lead Acid is $ - 56600 . (Round to the nearest hundreds.) The PW of the Lithium lon is $ 65400. (Round to the nearest hundreds.) Which alternative should be selected? Choose the correct answer below. Lithium lon Lead Acid
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