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 following

 For the data presented below on alternatives A and B and

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) First cost Uniform annual benefit Useful life Salvage value A B $5,300 $11,000 1,700 2,100 4 years 8 years 0 200 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 payback method: Choose... A or B Using the benefit-cost ratio method: Choose... A or B Using the internal rate of return method: Choose.... A or B 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) First cost Uniform annual benefit Useful life Salvage value A B $5,300 $11,000 1,700 2,100 4 years 8 years 0 200 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 payback method: Choose... A or B Using the benefit-cost ratio method: Choose... A or B Using the internal rate of return method: Choose.... A or B

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