Question: Potable water is in short supply in many developing countries. To address this need, two mutually exclusive water purification systems are being implementation in

Potable water is in short supply in many developing countries. To addressthis need, two mutually exclusive water purification systems are being implementation in

Potable water is in short supply in many developing countries. To address this need, two mutually exclusive water purification systems are being implementation in a developing country. Doing nothing is not an option. The MARR is 8% per year. Answer the following questions: a. Calculate the net AW of each system over the service life. b. Calculate the modified B/C ratio for each of the two systems. c. Use the B/C ratio method to determine which system is more economical. Initial Capital Annual Revenues Annual Costs System 1 System 2 $160,000 $260,000 $55,000 $84,000 $25,000 $43,000 Service life (years) 12 12 Salvage value $19,200 $57,200

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