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3. Compare the two following two alternatives using an equivalent worth method and a MARR of 12%. The repeatability assumptio

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Answer #1

EUAW of Alternative 1 = -45000 * (A/P, 12%,6) + 8000 + 4000 * (A/G, 12%,6) + 6500 * (A/F, 12%,6)

= -45000 * 0.243226 + 8000 + 4000 * 2.172047 + 6500 * 0.123226

= 6543.99

= 6544

EUAW of Alternative 2 = -60000 * (A/P, 12%,5) + 12000 + 9000 * (A/F, 12%,5)

= -60000 * 0.277410 + 12000 + 9000 * 0.157410

= -3227.90

As the EUAW of Alternative 1 is positive, it should be selected

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