Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 10% per year and a study period of 8 years. Alternative A B First cost, $ −15,000 −28,000 Annual operating cost, $/year −6,000 −9,000 Overhaul in year 4, $ — −2000 Salvage value, $ 3,000 5,000 Life, years 4 8
Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 10% per year and a study period of 8 years. Alternative A B First cost, $ −15,000 −28,000 Annual operating cost, $/year −6,000 −9,000 Overhaul in year 4, $ — −2000 Salvage value, $ 3,000 5,000 Life, years 4 8
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 2P
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Compare two alternatives, A and B, on the basis of
a present worth evaluation using i = 10% per year
and a study period of 8 years.
Alternative A B
First cost, $ −15,000 −28,000
Annual operating cost, $/year −6,000 −9,000
Overhaul in year 4, $ — −2000
Salvage value, $ 3,000 5,000
Life, years 4 8
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