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4. [9pts] Your company is considering two mutually exclusive alternatives for an improvement project. Do nothing is an option
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Answer #1

EUAW of option A = -100000 * (A/P, 15%,4) + 40000

= -100000 * 0.350265 + 40000

= 4973.46

EUAW of option B = -150000 * (A/P, 15%,5) + 25000 * (A/F, 15%,5) + 50000 - 4000 * (A/G, 15%,5)

= -150000 * 0.298316 + 25000 * 0.148316 + 50000 - 4000 * 1.722815

= 2069.30

As EUAW of A is more, it should be selected

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