The incremental cash flow present worth (PW) equation associated with two alternatives A and Bis:0 = -53,000+ 21,000(P/A, Ai*B-A,5) + 80000(P/F, Ai*B-A,5)Please provide the answers taking sign conventions into consideration. Determine the following:a) The first cost for Bb) The M&O for Ac) The salvage value of BProcessAlternative AAlternative BFirst Cost, $-30,000?M&O, $/Year?-11,000Salvage Value, $4,000?Life, Years55

Given: Two alternatives A and B is: 0 = -53,000+ 21,000(P/A, ∆i*B-A,5) + 80000(P/F, ∆i*B-A,5)

Answered: tirst cost for E M&O for A salvage…

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tirst cost for E M&O for A salvage value Proc First

Managerial Accounting

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ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2PA

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Question

The incremental cash flow present worth (PW) equation associated with two alternatives A and B
is:
0 = -53,000+ 21,000(P/A, Ai*B-A,5) + 80000(P/F, Ai*B-A,5)
Please provide the answers taking sign conventions into consideration. Determine the following:
a) The first cost for B
b) The M&O for A
c) The salvage value of B
Process
Alternative A
Alternative B
First Cost, $
-30,000
?
M&O, $/Year
?
-11,000
Salvage Value, $
4,000
?
Life, Years
5
5

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