Assessing Project Worth through Present and Annual Worth

You are considering two mutually exclusive alternatives with different useful lives of 4 and 6 years as shown below. The MARR is 10% per year and the market value is 0 at the end of each useful life.

Capital investment $3,500 $5,000
Annual cash flow 1,255 1,480
Useful life in years 4 6

Determine which alternative to recommend by the PW method and the AW method.

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