The cash flows given in table below are for two different alternatives. MARR =10
ID: 1098964 • Letter: T
Question
The cash flows given in table below are for two different alternatives. MARR =10%
Data
M
N
Initial Cost
$20,000
$80,000
Uniform Annual Benefits
$6,000
$10,000
Salvage Value
$5,000
$20,000
Useful Life in years
5
infinity
The equivalent uniform annual worth (EUAW) of alternative M may be expressed as below.
-6,000 - 5,000(A/F, 10%, 5 + {20,000(A/P, 10%, 5)}
-20,000(A/P, 10%, 5) + 5,000(A/F, 10%, 5) + 6,000
6,000 - {20,000 (1.15)-4 - 5,000(1.10)4}
6,000 - {20,000(A/P, 10%, 5) + 5,000(A/F, 10%, 5)}
Data
M
N
Initial Cost
$20,000
$80,000
Uniform Annual Benefits
$6,000
$10,000
Salvage Value
$5,000
$20,000
Useful Life in years
5
infinity
Explanation / Answer
-20,000(A/P, 10%, 5) + 5,000(A/F, 10%, 5) + 6,000
B.-20,000(A/P, 10%, 5) + 5,000(A/F, 10%, 5) + 6,000
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