Consider the following EOY cash flows for two mutually exclusive alternatives. (one must be chosen)

	Alternative A	Alternative B
Capital investment (TL)	4000	12000
Annual expenses (TL)	2800	2300
Useful life (years)	3	6
Market value at the end of	2900	2900
Useful life (TL)

The MARR is 8% per year.

a) Determine which alternative should be selected if the repeatability assumption applies. Use PW in your analysis.

PW (A) =?

PW (B) =?

Which one is preferred?

b) Determine which alternative should be selected if the analysis period is 6 years and the repeatability assumption does not apply. Use the AW method.

AW (A) =?

AW (B) =?

Which one is preferred?