Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $340,000, has gross revenues of$61,000, annual O &M costs of $13,000 and a service life of 16 years. What is the project's discounted payback period if the MARR is 8% per year?A. 13.5 yearsB. 10.9 yearsC. 7.7 yearsO D. 6.6 yearsIf the second alternative has a payback period of 6 years, which alternative should be preferred based on the payback period?O A. The second alternativeB. The first alternative

The payback period is described as the number of years needed to recover the original cash…

Answered: $61,000, annual O &M costs of $13,000…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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