Question 1 The following data have been estimated for two feasible investments, A and B, for which revenues as well as costs are known and which have different lives. If the minimum attractive rate of return is 8%, show which feasible alternative is more desirable by using NPW method. What is the difference in the NPW B-NPW (Not A-B) assuming repeatability? Ans. Sxxx.xx (STICK TO THE FORMAT) Alternative Investment Cost $ 4,500.00 $7,050.00 Annual Revenue $2,429.00 $2,506.00 Annual Cost $650.00 $1,488.00 Useful Life (Years) 12 Salvage Value $500.00 $930.00

Question 1 The following data have been estimated for two feasible investments, A and B, for which revenues as well as costs are known and which have different lives. If the minimum attractive rate of return is 8%, show which feasible alternative is more desirable by using NPW method. What is the difference in the NPW B-NPW (Not A-B) assuming repeatability? Ans. Sxxx.xx (STICK TO THE FORMAT) Alternative Investment Cost $ 4,500.00 $7,050.00 Annual Revenue $2,429.00 $2,506.00 Annual Cost $650.00 $1,488.00 Useful Life (Years) 12 Salvage Value $500.00 $930.00

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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