5) Evaluate the following 3 alternatives. $1,500 initial cost $1,848 $3,048 annual benefit $1,400 $1,500 $1,200 useful life 2 years 6 years 3 years salvage value $1,000 1,000 $1,500 Identical rep...

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5) Evaluate the following 3 alternatives. $1,500 initial cost $1,848 $3,048 annual benefit $1,400 $1,500 $1,200 useful life 2

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Answer 1

Answer #1

1	Annual Benefit	1400	1500	1200
2	Anuity PV @10%
	2.486851991	3481.593
	4.355260699		6532.891
	1.73553719			2082.645
3	Salvage Value	1000	1000	1500
4	PV of Salvage
	0.751314801	751.3148
	0.56447393		564.4739
	0.826446281			1239.669

5	Total Inflow
	2+4	4232.908	7097.365	3322.314

6	Initial Cost	1848	3048	1500

7	NPV (5-6)	2384.908	4049.365	1822.314

By NPV option C) B is the better option.

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Answer 2

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5) Evaluate the following 3 alternatives. $1,500 initial cost $1,848 $3,048 annual benefit $1,400 $1,500 $1,200 useful life 2 years 6 years 3 years salvage value $1,000 1,000 $1,500 Identical rep...

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Add Answer to: 5) Evaluate the following 3 alternatives. $1,500 initial cost $1,848 $3,048 annual benefit $1,400 $1,500 $1,200 useful life 2 years 6 years 3 years salvage value $1,000 1,000 $1,500 Identical rep...

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Consider four alternatives, each of which has an 8-year useful life: Initial cost Annual benefit Salvage...

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5) Evaluate the following 3 alternatives. $1,500 initial cost $1,848 $3,048 annual benefit $1,400 $1,500 $1,200 useful life 2 years 6 years 3 years salvage value $1,000 1,000 $1,500 Identical rep...