Use an 8-year analysis period and a 10% interest rate to determine which alternative should be selected:
Question:
Use an 8-year analysis period and a 10% interest rate to determine which alternative should be selected:
A B
First cost $5300 $10,700
Uniform annual benefit $1800 $2,100
Useful life, in years 4 8
Two alternative courses of action have the following schedules of disbursements:
Year A B
1 0 -$100
2 0 -200
3 0 -300
4 0 -400
5 0 -500
-$1300 -1500
Based on a 6% interest rate, which alternative should be selected?
Step by Step Answer: