Question: 3. Suppose that Alternative A, and A2 are two mutually exclusive alternatives with the cost and revenue estimates given in following table. End of Year

 3. Suppose that Alternative A, and A2 are two mutually exclusive

alternatives with the cost and revenue estimates given in following table. End

3. Suppose that Alternative A, and A2 are two mutually exclusive alternatives with the cost and revenue estimates given in following table. End of Year Alternative A Alternative A2 0 $-4,999.4 $-10,000 1-10 ? $2,800 Rate of Return (ROR) 25% ? Use the minimum attractive rate of return of 15% to determine the following statements. a) (10 Points) By using the present worth method, calculate the revenues for alternative Aq. b) (10 Points) Find the value of ROR for alternative Az. c) (10 Points) Which alternative should be selected? 15% End-of-Period Compound Interest Factors Single Payment Uniform Payment Series Compound Amount Factor F/P Present Worth Factor P/F Capital Recovery Factor A/P Present Worth Factor P/A Sinking Fund Factor A/F Compound Amount Factor F/A N 1 2 3 4 5 .8696 .7561 .6575 15718 4972 1.0000 4651 .2880 .2003 .1483 1142 .0904 20729 0596 0493 6 7. 1.1500 .6151 4380 3503 .2983 .2642 2404 2229 2096 1993 1911 1845 1791 1747 1.150 1.323 1.521 1.749 2.011 2.313 2.660 3.059 3.518 4.046 4.652 5.350 6.153 7.076 8.137 9.358 10.761 12.375 14.232 16.367 8 4323 3759 3269 2843 .2472 2149 .1869 . 1625 143 1229 9 10 1.000 2.150 3.473 4.993 6.742 8.754 11.067 13.727 16.786 20.304 24.349 29.002 34.352 .870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 0411 0345 0291 .0247 0210 15 47.580 0179 1679 1654 18 0808 0132 65.075 75.836 88.212 102.4 20 1598 00976

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