What is the present worth of this alternative

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Reference no: EM13832537

Consider an alternative with the following characteristics:

CII = $6,000,000 A = $190,000/year

EC = $800,000 (cost to you – an out-of-pocket expense to you) Major maintenance expense, CIa, of $550,000 in year 15 Service life = 30 years i = 7%

a) What is the present worth of this alternative?

b) What is the annual cost of this alternative?

c) What would its present worth be if its life was shortened to 25 years in order to compare it to another alternative of that length?

Reference no: EM13832537

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