For the following table, assume a MARR of 18% per year... For the following tabl
ID: 1155169 • Letter: F
Question
For the following table, assume a MARR of 18% per year...
For the following table, assume a MARR of 18% per year and a useful life for each alternative of eight years which equals the study period. The rank-order of alternatives from least capital investment to greatest capital investment is Z- Y- W- X. Complete the incremental analysis by selecting the preferred alternative. "Do nothing" is not an option. ? Capital investment Annual cost savings ? Market value ? PW (1896) $250 -$400$500 18 200 70 100 62 90 50 - 20 Click the icon to view the interest and annuity table for discrete compounding when 1-18% per year. The pw of ? (W-X) is . (Round to the nearest dollar.)Explanation / Answer
PW of (W-X) is -$373.4
Year
Z-Y
Y-W
W-X
0
-250
-400
-500
1
70.0
90
18
2
70.0
90
18
3
70.0
90
18
4
70.0
90
18
5
70.0
90
18
6
70.0
90
18
7
70.0
90
18
8
170
140
218
PW
$ 62
$ -20
$ -373.40
Using NPV=(0.18, select cash flow from year 1 to 8)+Year 0 cashflow
or
PW = -500+(18/(1+0.18)^1)+(18/(1+0.18)^2)+(18/(1+0.18)^3)+(18/(1+0.18)^4)+(18/(1+0.18)^5)+(18/(1+0.18)^6)+(18/(1+0.18)^7)+(218/(1+0.18)^8)
= -$373.4
Year
Z-Y
Y-W
W-X
0
-250
-400
-500
1
70.0
90
18
2
70.0
90
18
3
70.0
90
18
4
70.0
90
18
5
70.0
90
18
6
70.0
90
18
7
70.0
90
18
8
170
140
218
PW
$ 62
$ -20
$ -373.40