Given the data in the table below, choose the better alternative-using present w

Question

Given the data in the table below, choose the better alternative-using present worth analysis if MARR is 8%.

         Data

Alternative

A

B

Initial Cost

$10,000

$9,000

Annual Benefits

$5,200

$4,700

Annual Expenses

$3,000

$2,000

Salvage Value

$1,200

$1,300

Useful Life in Years

6

4

Alternative B, $2,040

Alternative A, $2,040

Alternative B, $1,510

Alternative A, $1,510

         Data

Alternative

A

B

Initial Cost

$10,000

$9,000

Annual Benefits

$5,200

$4,700

Annual Expenses

$3,000

$2,000

Salvage Value

$1,200

$1,300

Useful Life in Years

6

4

Explanation / Answer

Alternative B, $1,510

C.

Alternative B, $1,510

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