Homework Answers
Present worth analysis would be for 6 yrs (LCM of 2 & 3)
NPW of alt. A = -480 + 100 * (P/A,7%,6) - (480 - 116)*(P/F,7%,2) - (480 - 116)*(P/F,7%,4) + 116 * (P/F,7%,6)
= -480 + 100 *4.766540 - (480 - 116)*0.873439 - (480 - 116)*0.762895 + 116 *0.666342
= -521.67
NPW of alt. B = -1310 + 260 * (P/A,7%,6) - (1310 - 168)*(P/F,7%,3) + 168 * (P/F,7%,6)
= -1310 + 260 *4.766540 - (1310 - 168)*0.816298 + 168 *0.666342
= -890.97
Diff between NPW A - NPW B = -521.67 - (-890.97) = 369.30 ~ 369.88
Last option is correct answer
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