In a present worth analysis of certain equipment, one alternative has a net present worth of + 420, based on a 6-year analysis period that equals the useful life of the alternative. A 10% interest rate was used in the computations.
The alternative device is to be replaced at the end of the 6 years by an identical item with the same cost, benefits, and useful life. Based on a 10% interest rate, compute the net present worth of the alternative equipment for the 12-year analysis period.