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

4%

per year.

	Lead Acid	Lithium Ion
Capital investment	$5,000	$15,000
Annual expenses	$2,750	$2,300
Useful life	12 years	18 years
Market value at end of useful life	$0	$2,600

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Click the icon to view the interest and annuity table for discrete compounding when

i=4%

per year.

Question content area bottom

Part 1

a. Determine which alternative should be selected if the repeatability assumption applies.

The AW of the Lead Acid is

$enter your response here.

(Round to the nearest dollar.)

Part 2

The AW of the Lithium Ion is

$enter your response here.

(Round to the nearest dollar.)

Part 3

Which alternative should be selected? Choose the correct answer below.

Lithium Ion

Lead Acid

Part 4

b. Determine which alternative should be selected if the analysis period is 18 years, the repeatability assumption does not apply, and a battery system can be leased for

$6,000

per year after the useful life of either battery is over. The PW of the Lead Acid is

$enter your response here.

(Round to the nearest hundreds.)

Part 5

The PW of the Lithium Ion is

$enter your response here.

(Round to the nearest hundreds.)

Part 6

Which alternative should be selected? Choose the correct answer below.