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Equivalent Annual Worth

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With an interest rate of 10% per year and given the following estimates, the annual worth of alternative ''F'' is closest to?

A. $32,600
B. $36,100 ALTERNATIVE ''F''
C. $39,020
D. $43,500 First cost, $ -200,000
Annual cost, $/year -50,000
Annual Revenuue, $/year 120,000
Salvage Value, $ 25,000
Life, years 10

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Solution Preview

In order to find the annual worth, we first need to find the Present Worth (PW) of the alternative F. The net annual income is 120,000-50,000 = 70,000. The PW of this can be ...

Solution Summary

The solution explains how to calculate the present worth and annual worth