- Compare The Alternatives Shown Below On The Basis Of Their Capitalized Costs Using A Nominal Interest Rate 12 Per Year 1 (220.63 KiB) Viewed 31 times
- Compare The Alternatives Shown Below On The Basis Of Their Capitalized Costs Using A Nominal Interest Rate 12 Per Year 2 (278.46 KiB) Viewed 31 times
Compare the alternatives shown below on the basis of their capitalized costs, using a nominal interest rate 12% per year, compounded quarterly. (Hint: calculate effective rate per payment period first). Calculate the Capitalized Cost for each alternative and select the best option. Do not select until you have calculated the Capitalized Cost for each alternative. First Cost in $ Salvage value, $ Alternative A Alternative B Quarterly income, $/quarter +55,000 Life, in quarters -350,000 +50,000 12 quarters -700,000 +40,000 0.00 8
Quarterly income, $/quarter +55,000 Salvage value, $ Life, in quarters +50,000 12 quarters +40,000 0.00 Select Alternative A with CCA= +$778,733 Select Alternative B with CCB= +$1,333,333 Select Alternative A with CCA= +$661,300 8 Select Alternative B with CCB= +$633,333