Three mutually exclusive alternatives are being considered. i) Initial investment cost Annual net income Rate of Return A $43,000 B $24,000 $4,150 7.3% Each alternative has a 20 year useful life and no salvage value $2500 8.3% с $17,000 $1700 6.0% Calculate the PW of the three alternatives over an interest rate of 1 to 60%, construct a choice table for interest rates from 1 to 60% (1, 10, 20, ....60%).

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Three mutually exclusive alternatives are being considered.
Initial investment
cost
Annual net income
Rate of Return
A
$43,000
B
$24,000
$4,150
$2500
7.3%
8.3%
Each alternative has a 20 year useful life and no salvage value
с
$17,000
$1700
6.0%
i)
Calculate the PW of the three alternatives over an interest rate of 1 to 60%, construct
a choice table for interest rates from 1 to 60% (1, 10, 20, ....60%).
ii) If the minimum attractive rate of return is 7% which alternative should be selected?
Please submit the Excel graph along with the choice table and alternative chosen.
Transcribed Image Text:Three mutually exclusive alternatives are being considered. Initial investment cost Annual net income Rate of Return A $43,000 B $24,000 $4,150 $2500 7.3% 8.3% Each alternative has a 20 year useful life and no salvage value с $17,000 $1700 6.0% i) Calculate the PW of the three alternatives over an interest rate of 1 to 60%, construct a choice table for interest rates from 1 to 60% (1, 10, 20, ....60%). ii) If the minimum attractive rate of return is 7% which alternative should be selected? Please submit the Excel graph along with the choice table and alternative chosen.
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