Two mutually exclusive design alternatives are shown below. The MARR is 12% per year. Use the repeatability assumption. What is the PW of Alternative A and B? Which alternative should be recommended?
Two mutually exclusive design alternatives are shown below. The MARR is 12% per year. Use the repeatability assumption. What is the PW of Alternative A and B? Which alternative should be recommended?
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
Section: Chapter Questions
Problem 1PS
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Two mutually exclusive design alternatives are shown below. The MARR is 12% per year. Use the repeatability assumption.
What is the PW of Alternative A and B?
Which alternative should be recommended?
please solve normally, not excel.
![Alternative A
Alternative B
Сapital
$23,000
$25,000
Investment
Annual expenses $0
$0
Annual revenue
$17,000
$15,000
Market Value at
$0
end of useful life
$5,000
Life
5 years
8 years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbb522ccf-469e-4dd7-ba04-e85306add3cc%2F25843531-280d-4176-916a-c18ebffe10f0%2Flzvsrs_processed.png&w=3840&q=75)
Transcribed Image Text:Alternative A
Alternative B
Сapital
$23,000
$25,000
Investment
Annual expenses $0
$0
Annual revenue
$17,000
$15,000
Market Value at
$0
end of useful life
$5,000
Life
5 years
8 years
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