Year 0 123456 2 5 E - $90 20 20 20 20 20 20 F - $110 35 35 35 35 0 0 G - $100 0 10 20 30 40 50 H - $120 0 0 0 0 0 180 (a) Based on the payback period, which alternative is preferred? (b) Based on future worth analysis, which of the four alternatives is preferred at 5% interest? (c) Based on future worth analysis, which alternative is preferred at 20% interest?

8- The life of a project is 10 years. An equipment is needed for this project. Two alternatives are available. Equipment A has an initial cost of $5000.00, an annual maintenance cost of $300.00, and a salvage value of $800.00 after 5 years. Equipment B has an initial cost of $7000.00, an annual maintenance cost of $400.00, lasts for 10 years and has no salvage value. If the interest rate is 6%: a)  Equipment A should be purchased. b)  Equipment B should be purchased. c)  No equipment should be purchased. d)  There is no difference in choosing between A or B.

Hand written solutions are strictly prohibited

Given the following:                                      Alt. A            Alt. B            Alt. C Initial Cost                   $25,000         $40,000          $32,000   Benefits     Year 1         5000              2000               6000                    Year 2        5500              9000               6000                    Year 3        6000              8000               6000                    Year 4        6500              7000               6000                    Year 5         7200              6000               7000         Salvage Value        4000              8000               6500   MARR       8% Find the best alternative using uniform annual cash flow analysis.