Question: Exercise 4. For the cash flows shown, use an annual worth comparison and an interest rate of 10% per year. (a) Determine the alternative
Exercise 4. For the cash flows shown, use an annual worth comparison and an interest rate of 10% per year. (a) Determine the alternative that is economically best. (b) Determine the first cost required for each of the two alternatives not selected in question (a) so that all alternatives are equally acceptable. Use a spreadsheet to answer this question. X Z First cost. $ -90.000 -400.000 -650.000 Annual cost. -40,000 -20,000 -13.000 $ per year Overhaul every -80,000 10 years, S Salvage value, S Life, years 7,000 25,000 200.000 3 10
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