Answered: Capital Investment $100,000 $152,000…

Capital Investment $100,000 $152,000 $184,000 $75,000 Annual Revenues less expenses 15,200 31,900 35,900 41,500 Market Value (end of useful life) Useful life (years) 10,000 15,000 20,000 12 12 12 12

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the Table. If the MARR 15%per year and the analysis period is 12 years, use the PW method to determine PW1, PW2, PW3, PW4, and which one of those four is the best alternative ?

Capital Investment
Annual Revenues less expenses
$100,000
$152,000
$184,000
$75,000
15,200
31,900
35,900
41,500
Market Value (end of useful life)
10,000
15,000
20,000
Useful life (years)
12
12
12
12

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Present worth of alternative 1 (PW1)

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Present worth of alternative 2 (PW2)

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Present worth of alternative 3 (PW3)

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Present worth of alternative 4 (PW4)

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