Question: For the data presented below on alternatives A and B and assuming a 10% interest rate, determine which alternative should be recommended using the

For the data presented below on alternatives A and B and assuming a 10% interest rate, determine which alternative should be

For the data presented below on alternatives A and B and assuming a 10% interest rate, determine which alternative should be recommended using the following methods. Alternative A can be bought again at the end of its useful life. (40 points) A B First cost $5,300 $9,500 Uniform annual benefit 2,000 2,100 Useful life 4 years 8 years Salvage value 200 On the manual solution, Draw the required cash flow diagrams (6 pts) And make sure you include the following for ALL methods: What is the decision criteria? (6 pts) Present the required equivalency models. (10 pts) Show ALL calculations to choose the best alternative. (12 pts) What is the best alternative? (6 pts) Using the benefit-cost ratio method: Choose... Using the payback method: Choose... Using the internal rate of return method: Choose...

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Alternative A is the best since here net Present value of cash flow is the less 142 compared ... View full answer

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