Options are under consideration to meet a 12 period need are shown below. Options have different lives so an adjustment for equivalence is required to perform a valid analysis using engineering economic methods. The interest rate for use is 8.0%.

Option	A	B	C	D
Purchase Cost	65,000	41,000	29,000	19,000
First Year Operating Cost	4,500	6,400	7,500	8,100
Operating Cost Increase per Period	500	700	900	1400
Life/Salvage	6/4,000	4/2,000	3/1,500	2/800

a. What is the PW of Option A?    

b. What is the PW of Option B?

c. What is the PW of Option C?

d. What is the PW of Option D?

Answer rating: 100% (QA)

To calculate the Present Worth PW of each option we need to adjust the costs and benefits to an equi... View the full answer