X Y Z First cost, $ -90,000 -400,000 -900,000 M&O costs, $/month - 30,000 -20,000 - 13,000 Overhaul every 10 years, $ -80,000 Salvage value, $ Life, years 7000 25,000 200,000 3 10

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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For the cash flows below, use an annual worth comparison to determine which alternative is best at an interest rate of 1% per month.

X
Y
Z
First cost, $
-90,000 -400,000 -900,000
M&O costs, $/month
- 30,000
-20,000
- 13,000
Overhaul every 10 years, $
-80,000
Salvage value, $
Life, years
7000
25,000
200,000
3
10
Transcribed Image Text:X Y Z First cost, $ -90,000 -400,000 -900,000 M&O costs, $/month - 30,000 -20,000 - 13,000 Overhaul every 10 years, $ -80,000 Salvage value, $ Life, years 7000 25,000 200,000 3 10
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