Problem on the two mutually exclusive alternatives

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Reference no: EM131806427

Question: Two mutually exclusive alternatives are being considered. Both have lives of 5 years. Alternative A has a first cost of $2500 and annual benefits of $746. Alternative B costs $6000 and has annual benefits of $1664 If the minimum attractive rate of return is 8%, which alternative should be selected? Solve the problem by

(a) Present worth analysis

(b) Annual cash flow analysis

Reference no: EM131806427

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