FER MIDTERM II.pdf x + — File C:/Users/MED/Downloads/MIDTERM%2011.pdf ta ME 1 of 1 1 Q + IL | A | 1 MIDTERM II Exercise

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FER MIDTERM II.pdf x + — File C:/Users/MED/Downloads/MIDTERM%2011.pdf ta ME 1 of 1 1 Q + IL | A | 1 MIDTERM II Exercise 1 The Structure of costs associated with two mutually exclusive alternatives about a public project is presented below: Alternative A Alternative B Initial Cost! 500 300 Annual inspection and maintenance Additional cost every 10 years 1000 4. Initial cost II: License cost 20 2 2 350 If you consider i-6%, which alternative can be selected? (Give more details of the used approach and justify your choice) Exercise 2 Consider the following alternatives MARR-15% First cost (S) Net cash flow per year (S/year) Salvage value ($) Useful life (years) Alternative Alternative 2 Alternative 3 140 000 90 000 120 000 27500 12 000 24 000 7500 0 2500 10 10 10 Which alternative should be selected, based on: 1) Annual worth (AW) method 2) Internal rate of Return (I.R.R) method 67"F Sunny e ENG 0 1:02 PM 4/15/2022 20