2. Designers need to design how to continue the air in a new building with a...

  

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2. Designers need to design how to continue the air in a new building with a 40-year life. Four alternatives are available, both of which have 20-year lives. Costs are given below. Use 12% interest rate. First Cost SV in 20 years Ann. Fuel Cost Ann. Maint. Cost Tax (%) of FC A B 90,000 60,000 10,000 3,000 C D 85,000 72,000 8,000 12,000 9,000 5,000 4,500 3,500 2,200 3,200 1,800 2,400 3% 1.5% 2.3% 1.7% a. What is the present worth of alternative D? (10 points) b. What is the ROR of Alternative A?(10 points) c. Which is the best alternative? Use ROR on additional investment.(20points) 2. Designers need to design how to continue the air in a new building with a 40-year life. Four alternatives are available, both of which have 20-year lives. Costs are given below. Use 12% interest rate. First Cost SV in 20 years Ann. Fuel Cost Ann. Maint. Cost Tax (%) of FC A B 90,000 60,000 10,000 3,000 C D 85,000 72,000 8,000 12,000 9,000 5,000 4,500 3,500 2,200 3,200 1,800 2,400 3% 1.5% 2.3% 1.7% a. What is the present worth of alternative D? (10 points) b. What is the ROR of Alternative A?(10 points) c. Which is the best alternative? Use ROR on additional investment.(20points)

Answer rating: 100% (QA)

The image displays a table with financial data for four different alternatives A B C and D for continuing the air in a new building The alternatives have different costs and are evaluated based on the... View the full answer