Question 3 [2 Marks] Alternative A has a first cost of $32,000, an operating cost of...

 

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Question 3 [2 Marks] Alternative A has a first cost of $32,000, an operating cost of $5000 in year 1, $5500 in year 2, and those operating cost amounts are increasing by $500 every year until year 10. The salvage value is 20% of the first cost. Alternative B will have a first cost of $20,000, an annual operating cost of $3000 per year for 5 years, and no salvage value. (a) Find the future worth for alternatives A and B, using an MARR of 15% per year. (b) Which alternative should be selected based on the calculated future values. Question 3 [2 Marks] Alternative A has a first cost of $32,000, an operating cost of $5000 in year 1, $5500 in year 2, and those operating cost amounts are increasing by $500 every year until year 10. The salvage value is 20% of the first cost. Alternative B will have a first cost of $20,000, an annual operating cost of $3000 per year for 5 years, and no salvage value. (a) Find the future worth for alternatives A and B, using an MARR of 15% per year. (b) Which alternative should be selected based on the calculated future values.