Two mutually exclusive alternative are being considered for the environmental protection equipment at a petroleum refinary. one of these alternatives must be selected. The estimated cash flow for each alternatives are as follows. Use MARR of 10%

Note: Do not round in between solutions and round up to 2 decimal places for final answer

Answer the following: 

B. Assume the study period is shortened to Five years. The market value of Alternative B after Five years is estimated to be $15,000. Which alternative would you recommend? Use Annual Worth method 

Transcribed Image Text:

Alternative A Alternative B $20,000 $38,000 Capital Investment Annual Expenses 5,500 4,000 Market Value at end of useful 1,000 4,200 life Useful life 5 years 10 years Alternative A Alternative B $20,000 $38,000 Capital Investment Annual Expenses 5,500 4,000 Market Value at end of useful 1,000 4,200 life Useful life 5 years 10 years

Answer rating: 100% (QA)

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