help with 3&4 3 - Use a 10-year analysis period and a 10% interest rate to determine whichalternative should be selected:First CostUniform Annual BenefitUseful life, in yearsA$6500$18005First CostAnnual O&MOSalvage ValueOverhaul (Year 6)Life in years4 - Which equipment is preferred using PW analysis if the firm's interest rate is15%? In PW terms how great is the difference?B$12000$200010A$45000$3900$0$1000010B$35000$4200$5000$05

Present worth, also known as present value, refers to the current value of a future stream of cash…

Answered: 3- Use a 10-year analysis period and a…

3- Use a 10-year analysis period and a 10% interest rate to determine which alternative should be selected: First Cost Uniform Annual Benefit Useful life, in years A $6500 $1800 5 B $12000 $2000 10

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

help with 3&4

3 - Use a 10-year analysis period and a 10% interest rate to determine which
alternative should be selected:
First Cost
Uniform Annual Benefit
Useful life, in years
A
$6500
$1800
5
First Cost
Annual O&MO
Salvage Value
Overhaul (Year 6)
Life in years
4 - Which equipment is preferred using PW analysis if the firm's interest rate is
15%? In PW terms how great is the difference?
B
$12000
$2000
10
A
$45000
$3900
$0
$10000
10
B
$35000
$4200
$5000
$0
5

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