Answered: Problem2. Josh created two cash flow… | bartleby

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

5th Edition

ISBN:9781305084766

Author:Saeed Moaveni

Publisher:Saeed Moaveni

Chapter20: Engineering Economics

Section: Chapter Questions

Problem 21P

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Problem2. Josh created two cash flow diagrams shown at the bottom of this page. The cash
flows for alternative B represent two life cycles of A. Calculate the annual worth value of each
over the respective life cycles to demonstrate that they are the same. Use an interest rate of 10%
per year.
Alternative A
Alternative B
$1000
i = 10% per year
$1000
1
3
2 3
4 5 6
Year
Year
$25
$25 $25
$25 $25
$25
$25
$25 $25
$4000
$5000
$5000
2.

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