Compare alternatives A andB with the present worth method if the MARR is 11% per year....

 

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Compare alternatives A andB with the present worth method if the MARR is 11% per year. Which one would you recommend? Assume repeatability and a study period of 12 years. Capital Investment $55,000 $25,000 Operating Costs $5,000 at end of year 1 and increasing $10,000 at end of year 1 and increasing by $1,000 per year thereafter by $500 per year thereafter $5,000 every 3 years Overhaul Costs None 12 years $10,000 if just overhauled 6 years negligible Life Salvage Value Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. The PW of Alternative A is $ . (Round to the nearest dollar.) Compare alternatives A andB with the present worth method if the MARR is 11% per year. Which one would you recommend? Assume repeatability and a study period of 12 years. Capital Investment $55,000 $25,000 Operating Costs $5,000 at end of year 1 and increasing $10,000 at end of year 1 and increasing by $1,000 per year thereafter by $500 per year thereafter $5,000 every 3 years Overhaul Costs None 12 years $10,000 if just overhauled 6 years negligible Life Salvage Value Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. The PW of Alternative A is $ . (Round to the nearest dollar.)

Answer rating: 100% (QA)

Write down all costs in an excel table and use the formula as below to find PV of alternative A A B ... View the full answer