Question: Data for two mutually exclusive alternatives are given below. Alternative A Alternative B Initial Cost $4,000 $3,000 Annual Benefits (beginning at the end of year
Data for two mutually exclusive alternatives are given below.
| Alternative A | Alternative B | |
| Initial Cost | $4,000 | $3,000 |
| Annual Benefits (beginning at the end of year 1) | $1,000 | $600 |
| Annual Costs (beginning at the end of year 1) | $300 | $100 |
| Salvage Value | $500 | $0 |
| Useful Life (years) | 5 | 10 |
Compute the net present worth for each alternative and choose the better alternative. MARR = 7%
A. None can be chosen
B. Alternative A
C. Alternative B
D. Any alternative can be chosen
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