Compare the following alternatives on the basis c heir capitalized costs at i= 8% per year and selec he best alternative. Alternative Alternative 1 Alternative 2

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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Compare the following alternatives on the basis of
their capitalized costs at i= 8% per year and select
the best alternative.
Alternative
Alternative 1 Alternative 2
First Cost
$230040
- $705369
AOC, per year - $16345
- $10096
Salvage Value $31032
$149186
Life, years
Select one:
a. Alternative 1 is selected, CC of selected
alternative is $-773451
b. Alternative 2 is selected, CC of selected
alternative is $-773451
c. Alternative 2 is selected, CC of selected
alternative is $-704506
d. Alternative 2 is selected, CC of selected
alternative is $-706456
e. Alternative 1 is selected, CC of selected
alternative is $-704506
Transcribed Image Text:Compare the following alternatives on the basis of their capitalized costs at i= 8% per year and select the best alternative. Alternative Alternative 1 Alternative 2 First Cost $230040 - $705369 AOC, per year - $16345 - $10096 Salvage Value $31032 $149186 Life, years Select one: a. Alternative 1 is selected, CC of selected alternative is $-773451 b. Alternative 2 is selected, CC of selected alternative is $-773451 c. Alternative 2 is selected, CC of selected alternative is $-704506 d. Alternative 2 is selected, CC of selected alternative is $-706456 e. Alternative 1 is selected, CC of selected alternative is $-704506
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