Question: The alternatives listed below are compared using the annual worth criterion. With an annual interest rate of 10%, the values of n that would be
The alternatives listed below are compared using the annual worth criterion. With an annual interest rate of 10%, the values of n that would be used in the factors (A/P,i,n) so that comparison is correct for the Annual Value method are:
| A | B | |
| Initial Cost | -50,000 | -90,000 |
| Annual Cost | -10,000 | -4,000 |
| Salvage value | 13,000 | 15,000 |
| Life, years | 3 | 6 |
a. n =3 years for A y 3 years for B b. n =3 yeers for A y 6 years for B c. Either a or b previous options d. Neither a. or b.
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