Question: (Q. 1-4) A county project engineer is considering two mutually exclusive alternatives as part of a county infrastructure improvement program. The alternatives have following cash

(Q. 1-4) A county project engineer is considering

(Q. 1-4) A county project engineer is considering two mutually exclusive alternatives as part of a county infrastructure improvement program. The alternatives have following cash flow: Alternative A Alternative B Installation cost ($) -15,000 -20,000 Uniform annual benefit ($) 2,600 2,500 Useful Life (years) 20 The minimum attractive rate of return to be considered is 10%. Determine which alternative should be selected on the basis of a present worth comparison using the Least Common Multiple. Choose the closest answer. 10 1. What is the Least Common Multiple of both alternatives? a. 5 years b. 10 years c. 20 years d. 40 years 2. What is the net present value (present worth) of the Alternative A? a. $ -15,000 b. $ 976 c. $ 1,352 d. $ 7,135 3. What is the net present value (present worth) of the Alternative B? a. $ -20,000 b. $ -5,093 c. $ 1,284 d. $ 15,361 4. Which alternative should be selected? a. Alternative A b. Alternative B

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