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Problem:

Determine the present worth of the following alternatives. Use an interest rate of 6%. Include a Cash Flow Diagram for each:

Alt. X

Alt.Y

Initial cost

$12,500

$8,900

Annual benefit

$6,800

$2,000

Salvage value

$5,000

$8,900

Life in years

2 years

3 Years

Problem: Determine the present worth of the following alternatives. Use an interest rate of 6%. Include a Cash Flow Diagram for each: Alt. X Alt.Y Initial cost $12,500 $8,900 Annual benefit $6,800 $2,000 Salvage value $5,000 $8,900 Life in years 2 years 3 Years