You are choosing a pump to go into a fire protection system in a high rise office building.  You have narrowed your selection to three brands.  The relevant information is presented in the table below.  Assuming an interest rate of 5%, what is the most attractive choice?     Alternative A Alternative B Alternative C Type Add – Sum – Pressure HP Pumps Test – Me – Often Life 20 years 15 years 10 years Initial Cost $450,000 $350,000 $250,000 Maintenance $2,000 $3,000 $5,500     Alternative A     Alternative B     Alternative C     Both Alternative B and C are equally attractive

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
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  1. You are choosing a pump to go into a fire protection system in a high rise office building.  You have narrowed your selection to three brands.  The relevant information is presented in the table below.  Assuming an interest rate of 5%, what is the most attractive choice?

     

     

    Alternative A

    Alternative B

    Alternative C

    Type

    Add – Sum – Pressure

    HP Pumps

    Test – Me – Often

    Life

    20 years

    15 years

    10 years

    Initial Cost

    $450,000

    $350,000

    $250,000

    Maintenance

    $2,000

    $3,000

    $5,500

       

    Alternative A

       

    Alternative B

       

    Alternative C

       

    Both Alternative B and C are equally attractive

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