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Equivalent Annual Worth

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

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