Compare the Annual Worth of the two systems and identify the better option at MARR = 10% per year: Solar: First cost $1,500,000; AOC $-700,000; Salvage value $100,000; Life of 8 years Geothermal: First cost $2,250,000; AOC $-600,000; Salvage value $50,000; Life of 8 years Select the Geothermal System with a calculated AW of $-1,017,368 Select the Geothermal System with a calculated AW of $-727,591

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
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Compare the Annual Worth of the two systems and identify the better option at
MARR = 10% per year:
Solar: First cost $1,500,000; AOC $-700,000; Salvage value $100,000; Life of 8
years
Geothermal: First cost $2,250,000; AOC $-600,000; Salvage value $50,000; Life of 8
years
Select the Geothermal System with a calculated AW of $-1,017,368
Select the Geothermal System with a calculated AW of $-727,591
Select the Solar System with a calculated AW of $-1,238,
Select the Solar System with a calculated AW of $-972,416
Transcribed Image Text:Compare the Annual Worth of the two systems and identify the better option at MARR = 10% per year: Solar: First cost $1,500,000; AOC $-700,000; Salvage value $100,000; Life of 8 years Geothermal: First cost $2,250,000; AOC $-600,000; Salvage value $50,000; Life of 8 years Select the Geothermal System with a calculated AW of $-1,017,368 Select the Geothermal System with a calculated AW of $-727,591 Select the Solar System with a calculated AW of $-1,238, Select the Solar System with a calculated AW of $-972,416
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