Please explain both question in detail. Question 4 Not yet answered Points out o
ID: 2819976 • Letter: P
Question
Please explain both question in detail.
Question 4 Not yet answered Points out of 1.00 Which analysis period would you recommend for the present worth analysis comparing two different devices, one with a 5-year useful life, and one with a 10-year useful life? Select one 0 a. infinite O b. 20 years O c. 5 years O d. 10 years Fiog question Oe50 years Question 5 Not yet answered Points out of 1.00 Which analysis period would you recommend for the present worth analysis comparing two different devices, one with a 4-year useful life, and one with a 6-year useful life? Select one O a. 6 years O b. 12 years O c. infinite O d. 18 years O e. 24 years Fleg questionExplanation / Answer
Answer 4:
By present worth analysis we mean the process of obtaining equivalent worth of future cash flows.
The analysis period should be determined from the situations. As per the situations provided we have noted that useful life of the projects are different.One is of 5 years and other is with 10 years. We can have a common multiplier of 5 in the given case. Hence we will select period of 10 years as analysis period.(5x2 =10 years).
d. 10 years
5. In this case we have noted that the useful life of different devices are 4 years and 6 years hence we will select the period of 12 years as the period analysis.
b.12 years.