Question: 1. Alpha's Net Future Worth (NFW) at EOY5. 2. Gamma's Net Present Worth (NPW) at EOYO. 3. Alpha's NPW at EOYO. 4. Beta's Annual Equivalent

1. Alpha's Net Future Worth (NFW) at EOY5. 2. Gamma's Net Present Worth (NPW) at EOYO. 3. Alpha's NPW at EOYO. 4. Beta's Annual Equivalent Worth (AEW). 5. Gamma's AEW over 20 years (it was repeated). 6. The best of the three (3) diners based on the NFW decision criterion. The Simple Diner Company is analyzing the purchase of a diner in the west end of the city. The key parameters of three diners under scrutiny are provided below. Parameters Alpha Beta Gamma 1. Initial Cost ($) $425,000 550,000 620,000 $290,000 at EOY1 $275,000 increasing $250,000 at EOY1 annually from annually by 2% decreasing 2. Revenues ($) EOY1 to EOY5; to EOY5; annually $280,000 $315,000 at thereafter by 2% annually from EOY6 EOY6 to EOY10 decreasing annually by 2% to EOY10. $177,000 at EOY1 increasing $114,000 at EOY1 $165,000 at annually by 3. Operating decreasing annually EOY1 increasing $1,000 to EOY5; Costs thereafter by annually $183,000 at ($) thereafter by 1% $1,000 EOY6 increasing annually by 3% to EOY10 4. End-of-life salvage value $-5,000 10,000 5,000 ($) 5. Useful life 5 years (years) 10 years All parameter values are fictitious. EOY = End-of-year Industry Standard = 4 years MARR = 10% 10 years
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