Three mutually exclusive alternatives are being considered. i) Initial investment cost Annual net income Rate of Return A $43,000 B $24,000 $4,150 7.3% Each alternative has a 20 year useful life and no salvage value $2500 8.3% с $17,000 $1700 6.0% Calculate the PW of the three alternatives over an interest rate of 1 to 60%, construct a choice table for interest rates from 1 to 60% (1, 10, 20, ....60%).

Three mutually exclusive alternatives are being considered. i) Initial investment cost Annual net income Rate of Return A $43,000 B $24,000 $4,150 7.3% Each alternative has a 20 year useful life and no salvage value $2500 8.3% с $17,000 $1700 6.0% Calculate the PW of the three alternatives over an interest rate of 1 to 60%, construct a choice table for interest rates from 1 to 60% (1, 10, 20, ....60%).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given the following three mutually exclusive alternatives, What alternative is preferable, if any, assuming i = 10%? a. Find PWA = $ b. Find PWB = $ c. Find PWC = $ d. Choose Alternative
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