Requirement One: Use the data to compute for each option the NPV at discount rates of 6 percent, the BCR at the same rates, and the internal rate of return. (Include the formulas for each category

(the capital cost is added to the operating and maintenance cost)

Requirement Two: Which of the two options do you recommend as an investment and why?

		Option A (using Discount Rates of 6%)							Option B (using Discount Rates of 6%)				Option A		Option B
Year	Total Cost	Present Value	Benefits		Present Value		Year	Total Cost	Present Value	Benefits	Present Value		Cash Flows		Cash Flows
1	2,000,000		$0				1	2,500,000		0
2	750,000		$680,000				2	925,000		575,000
3	375,000		$680,000				3	175,000		575,000
4	65,000		$680,000				4	80,000		575,000
5	65,000		$680,000				5	80,000		575,000
6	65,000		$680,000				6	80,000		575,000
7	65,000		$680,000				7	80,000		475,000
8	65,000		$680,000				8	80,000		475,000
9	65,000		340,000				9	80,000		475,000
10	65,000		340,000				10	80,000		475,000
										4,775,000
		NPV, 6%							NPV, 6%
		BCR, 6%							BCR, 6%				IRR