Data Alternative X Alternative Y Alternative Z Initial Cost $6,000 $1,000 $1,500
ID: 2506207 • Letter: D
Question
Data Alternative X Alternative Y Alternative Z
Initial Cost $6,000 $1,000 $1,500
Uniform Annual Benefits $810 $125 $ 230
Useful Life in Years 20 INFINITE 10
MARR 12%
Calculate NPW of X, Y, and Z. SHOW WORK.
Explanation / Answer
Hi,
Please find the answer as follows:
NPW of X = -6000 + 810/(1+.12)^1 + 810/(1+.12)^2 + 810/(1+.12)^3 + 810/(1+.12)^4 + 810/(1+.12)^5 + 810/(1+.12)^6 + 810/(1+.12)^7 + 810/(1+.12)^8 + 810/(1+.12)^9 + 810/(1+.12)^10 + 810/(1+.12)^11+ 810/(1+.12)^12+ 810/(1+.12)^13+ 810/(1+.12)^14+ 810/(1+.12)^15+ 810/(1+.12)^16+ 810/(1+.12)^17+ 810/(1+.12)^18+ 810/(1+.12)^19+ 810/(1+.12)^20 = 50.249 or 50.25
NPW of Y = -1000 + 125/12% = 41.67
NPW of Z = -1500 + 230/(1+.12)^1 + 230/(1+.12)^2 + 230/(1+.12)^3 + 230/(1+.12)^4 + 230/(1+.12)^5 + 230/(1+.12)^6 + 230/(1+.12)^7 + 230/(1+.12)^8 + 230/(1+.12)^9 + 230/(1+.12)^10 = -200.45
Thanks.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.