Question

Consider the following alternatives:
A B C
Initial cost $100.00 $150.00 $200.00
Uniform annual benefit 10.00 17.62 55.48
Useful life, in years Infinite 20 5
Use present worth analysis, an 8% interest rate, and an infinite analysis period. Which alternative should be selected in each of the two following situations?
1. Alternatives B and C are replaced at the end of their useful lives with identical replacements.
2. Alternatives Band C are replaced at the end of their useful lives with alternatives that provide an 8% rate of return.


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  • CreatedFebruary 25, 2010
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