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Two alternatives are being considered: A B 5000 9200 1750 1850 First cost Uniform annual...

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Two alternatives are being considered: A B 5000 9200 1750 1850 First cost Uniform annual benefit Useful life, in years 4 8 If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 1. Use the increment analysis, we should use 2. Terms n= 3. The Increment CFD has 3 basic patterns: O AP= O AA= F= occurred at end of year 4. AROR= % 5. Choose Two alternatives are being considered: A B 5000 9200 1750 1850 First cost Uniform annual benefit Useful life, in years 4 8 If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 1. Use the increment analysis, we should use 2. Terms n= 3. The Increment CFD has 3 basic patterns: O AP= O AA= F= occurred at end of year 4. AROR= % 5. Choose

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