a. Define Time Value Money and provide an example. b. Select the best alternative with i% = 10% compounded per year from the options given in Table Q3(a) and (b). Demonstrate the analysis of Present Worth (PW) with the i% is at 10% per year for Project A & B for selection of alternatives. The labor cost is effective for items noted as * and is also bound to its own compounded interest rate. The labor cost is effective once the warranty is over or void. Sponsorship only happens once at $10k for A and $7k for B. Warranty will be void via non-authorized activities. During the warranty period, the labor cost will be free. Provide insight on the evaluation method used in the eventual determination of the best alternative. You may use a shorter route of analysis where applicable but need to show all conversions. Note: $1k = $1,000.

Table Labor Cost discount Type A Type B (a) Description 10% discount from the last job 10% discount from the first job Table (6) A $10k 9k Ik 2k 3k Ik B $15k 14k 2k 3k 2k Initial Investment Annual Cash Influx Annual Cash Outflux-1 Annual Cash Outflux-2 *Repair (on n=1st year) *Upgrade (on n= 2nd year) *Illegal modification (n=1st year) Salvage cost Labor Cost Labor Cost Type Warranty Life cycle 6k ik A 1 5 years 3k Yes, 1k 8k ik B 2 5 years Table Labor Cost discount Type A Type B (a) Description 10% discount from the last job 10% discount from the first job Table (6) A $10k 9k Ik 2k 3k Ik B $15k 14k 2k 3k 2k Initial Investment Annual Cash Influx Annual Cash Outflux-1 Annual Cash Outflux-2 *Repair (on n=1st year) *Upgrade (on n= 2nd year) *Illegal modification (n=1st year) Salvage cost Labor Cost Labor Cost Type Warranty Life cycle 6k ik A 1 5 years 3k Yes, 1k 8k ik B 2 5 years