Consider these two alternatives. Alternative 1 $4,100 $1,400 $380 $800 years Alternative 2 $6,400 $1,900 $500...

 

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Consider these two alternatives. Alternative 1 $4,100 $1,400 $380 $800 years Alternative 2 $6,400 $1,900 $500 $1,250 Capital investment Annual revenues Annual expenses Estimated market value Useful life 6 11 years a. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial decision based on these data would be reversed? The annual MARR is 18% per year. b. Determine the life of Alternative 1 for which the AWS are equal. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. a. The capital investment of Alternative 2 would have to be $ or less for the initial decision to be reversed. (Round to the nearest dollar.) N 123 + 2 3 4 56789 10 11 12 13 14 15 Single Payment Compound Amount Present Factor Worth Factor To Find F Given P FIP 1.1800 1.3924 1.6430 1.9388 2.2878 2.6996 3.1855 3.7589 4.4355 5.2338 6.1759 7.2876 8.5994 Discrete Compounding; i = 18% 10.1472 11.9737 To Find P Given F PIF 0.8475 0.7182 0.6086 0.5158 0.4371 0.3704 0.3139 0.2660 0.2255 0.1911 0.1619 0.1372 0.1163 0.0985 0.0835 Compound Amount Factor To Find F Given A FIA 1.0000 2.1800 3.5724 5.2154 7.1542 9.4420 12.1415 15.3270 19.0859 23.5213 28.7551 34.9311 42.2187 50.8180 60.9653 Uniform Series Present Worth Factor To Find P Given A PIA 0.8475 1.5656 2.1743 2.6901 3.1272 3.4976 3.8115 4.0776 4.3030 4.4941 4.6560 4.7932 4.9095 5.0081 5.0916 Sinking Fund Factor To Find A Given F AIF 1.0000 0.4587 0.2799 0.1917 0.1398 0.1059 0.0824 0.0652 0.0524 0.0425 0.0348 0.0286 0.0237 0.0197 0.0164 Capital Recovery Factor To Find A Given P AIP 1.1800 0.6387 0.4599 0.3717 0.3198 0.2859 0.2624 0.2452 0.2324 0.2225 0.2148 0.2086 0.2037 0.1997 0.1964 Consider these two alternatives. Alternative 1 $4,100 $1,400 $380 $800 years Alternative 2 $6,400 $1,900 $500 $1,250 Capital investment Annual revenues Annual expenses Estimated market value Useful life 6 11 years a. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial decision based on these data would be reversed? The annual MARR is 18% per year. b. Determine the life of Alternative 1 for which the AWS are equal. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. a. The capital investment of Alternative 2 would have to be $ or less for the initial decision to be reversed. (Round to the nearest dollar.) N 123 + 2 3 4 56789 10 11 12 13 14 15 Single Payment Compound Amount Present Factor Worth Factor To Find F Given P FIP 1.1800 1.3924 1.6430 1.9388 2.2878 2.6996 3.1855 3.7589 4.4355 5.2338 6.1759 7.2876 8.5994 Discrete Compounding; i = 18% 10.1472 11.9737 To Find P Given F PIF 0.8475 0.7182 0.6086 0.5158 0.4371 0.3704 0.3139 0.2660 0.2255 0.1911 0.1619 0.1372 0.1163 0.0985 0.0835 Compound Amount Factor To Find F Given A FIA 1.0000 2.1800 3.5724 5.2154 7.1542 9.4420 12.1415 15.3270 19.0859 23.5213 28.7551 34.9311 42.2187 50.8180 60.9653 Uniform Series Present Worth Factor To Find P Given A PIA 0.8475 1.5656 2.1743 2.6901 3.1272 3.4976 3.8115 4.0776 4.3030 4.4941 4.6560 4.7932 4.9095 5.0081 5.0916 Sinking Fund Factor To Find A Given F AIF 1.0000 0.4587 0.2799 0.1917 0.1398 0.1059 0.0824 0.0652 0.0524 0.0425 0.0348 0.0286 0.0237 0.0197 0.0164 Capital Recovery Factor To Find A Given P AIP 1.1800 0.6387 0.4599 0.3717 0.3198 0.2859 0.2624 0.2452 0.2324 0.2225 0.2148 0.2086 0.2037 0.1997 0.1964

Answer rating: 100% (QA)

To determine how much the estimate of capital investment for Alternative 2 would have to vary so that the initial decision based on these data would be reversed we first need to calculate the net pres... View the full answer