Question

Multiple Alternatives 8- Each alternative has a 10-year useful life and no salvage value. 12 B C Initial cost $2000 $7500 $3900 Uniform annual benefits 395 1150 650 (a) Construct a choice table for interest rates from 0% to 100% (b) If the MARR is 8%, which alternative should be selected?

please show me what you type for the fx= on the excel sheet.. I want to do it on excel

Answer 1

Pls see table below. Project A is best at 8%

	A	B	C
Initial Cost	2,000	7,500	3,900
Uniform Annual Benefit	395	1,150	650
Life	10	10	10
PV (Uniform Annual Benefit)	Uniform annual benefit * ((1-(1+rate of interest)^(-Life))/(rate of interest))
Value of project	PV (Uniform Annual Benefit - Initial Cost)
Rate of interest
1%	1,741	3,392	2,256
2%	1,548	2,830	1,939
3%	1,369	2,310	1,645
4%	1,204	1,828	1,372
5%	1,050	1,380	1,119
6%	907	964	884
7%	774	577	665
8%	650	217	462
9%	535	-120	271
10%	427	-434	94
20%	-344	-2,679	-1,175
30%	-779	-3,945	-1,890
40%	-1,047	-4,724	-2,331
50%	-1,224	-5,240	-2,623
60%	-1,348	-5,601	-2,827
70%	-1,439	-5,865	-2,976
80%	-1,508	-6,067	-3,090
90%	-1,562	-6,224	-3,179
100%	-1,605	-6,351	-3,251