USE PRESENT WORTH. Show complete solution and cash flow diagram There is a continuing requirement for stand by electrical power at a public utility service facility. Alternative A involves an initial cost of $72,000, a 3-year useful life. and an annual cost of $2,200 the first year and increasing $300 per year thereafter and a net salvage value of $8,400 at the end of the useful life. Alternative B has an initial cost of $90,000. a six-year useful life, and annual cost of 2,100 and a net salvage value of $13,000. The current interest rate is 10% annually. What alternative are you going to recommend if you use co terminated (study period is 3 years, epsilon = 10%) assumption?

Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
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USE PRESENT WORTH. Show complete solution and cash flow diagram

There is a continuing requirement for stand by electrical power at a public utility
service facility. Alternative A involves an initial cost of $72,000, a 3-year useful life.
and an annual cost of $2,200 the first year and increasing $300 per year thereafter
and a net salvage value of $8,400 at the end of the useful life. Alternative B has an
initial cost of $90,000. a six-year useful life, and annual cost of 2,100 and a net
salvage value of $13,000. The current interest rate is 10% annually. What
alternative are you going to recommend if you use co terminated (study period is 3 years, epsilon = 10%) assumption?

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