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You have identified three alternatives for a small project at your plant. The interest rate is 4.8808848 % per semiannual. Alternative F Initial Cost, $ 180,000 Salvage Value, $ 80,000 Annual Cost, $ 16,000 Annual Revenue,$ 86,000 Life, years 4 G H 100,000 120,000 12,000 18,000 12,000 10,000 70,000 60,000 3 a) (15 pts) What is the LCM of the life of three alternatives if alternative H has a project life of 11 year? Which alternative should be selected? b) Which alternative should be selected if alternative H has an infinite life?

You have identified three alternatives for a small project at your plant. The interest rate is 4.8808848 % per semiannual. Alternative F Initial Cost, $ 180,000 Salvage Value, $ 80,000 Annual Cost, $ 16,000 Annual Revenue,$ 86,000 Life, years 4 G H 100,000 120,000 12,000 18,000 12,000 10,000 70,000 60,000 3 a) (15 pts) What is the LCM of the life of three alternatives if alternative H has a project life of 11 year? Which alternative should be selected? b) Which alternative should be selected if alternative H has an infinite life?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please show factors and do not use excel.
You have identified three alternatives for a small project at your plant. The interest rate is 4.8808848 % per semiannual. Alternative F Initial Cost, $ 180,000 Salvage Value, $ 80,000 Annual Cost, $ 16,000 Annual Revenue,$ 86,000 Life, years 4 G H 100,000 120,000 12,000 18,000 12,000 10,000 70,000 60,000 3 a) (15 pts) What is the LCM of the life of three alternatives if alternative H has a project life of 11 year? Which alternative should be selected? b) Which alternative should be selected if alternative H has an infinite life?
Transcribed Image Text:You have identified three alternatives for a small project at your plant. The interest rate is 4.8808848 % per semiannual. Alternative F Initial Cost, $ 180,000 Salvage Value, $ 80,000 Annual Cost, $ 16,000 Annual Revenue,$ 86,000 Life, years 4 G H 100,000 120,000 12,000 18,000 12,000 10,000 70,000 60,000 3 a) (15 pts) What is the LCM of the life of three alternatives if alternative H has a project life of 11 year? Which alternative should be selected? b) Which alternative should be selected if alternative H has an infinite life?
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