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Use the present worth analysis method to determine which alternative (A or B) one should choose. Assume that the interest i = 8% per year.

A B

First cost $5,500 $11,000

Annual benefit $1,850 $2,100

Salvage value $500 $1,000

Useful life, in years 4 8

(a) Compute the net present worth of alternative A.

(b) Compute the net present worth of alternative B.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91535701

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