Solution-Equivalent uniform annual worth of alternative

Equivalent uniform annual worth of alternative

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Reference no: EM132009620

Consider the following two mutually exclusive alternatives:

Alternative 1 Alternative 2

Cost $9,000 $12,500

Uniform annual benefit 1,300 1,900

Useful life, in years forever 12

Alternative 2 may be replaced with an identical item every 12 years at the $12,500 cost and will have the $1,900 uniform annual benefit. Assume a 10% interest rate and you must use annual cash flow analysis. What is the equivalent uniform annual worth of each alternative?

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Reasoning/Work:

Reference no: EM132009620

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Equivalent uniform annual worth of alternative

Reference no: EM132009620

Reference no: EM132009620

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