Three different alternatives shown in table below are being considered by Kal Te
ID: 1241627 • Letter: T
Question
Three different alternatives shown in table below are being considered by Kal Tech Engineering
systems. Assume that alternatives X and Z are replaced at the end of their lives.
Data
Alternative X
Alternative Y
Alternative Z
Initial Cost
$6,000
$1,000
$1,500
Annual Benefits
$810
$125
$230
Useful Life in Years
20
Infinity
10
Interest
none
12%
none
The NPV of alternative
Data
Alternative X
Alternative Y
Alternative Z
Initial Cost
$6,000
$1,000
$1,500
Annual Benefits
$810
$125
$230
Useful Life in Years
20
Infinity
10
Interest
none
12%
none
Explanation / Answer
b. Alternative Y is the most desirable alternative.
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