4.Your design team has produced two alternative designs for greenhouses in a developing country. Alternative A has an initial cost of $200 and will last two years. Alternative B has an initial cost of $1,000 and will last ten years.

a. All other things being equal, determine which greenhouse is more economical with a discount rate of 10%. An easy way to do this would be to list out the cash flows each year. (2 pts)

b. What other factors might influence this decision? (2 pts)

Answer rating: 100% (QA)

a To determine which greenhouse is more economical we need to calculate the present value PV of the cash flows associated with each alternative The pr... View the full answer