Given the following data, use present worth analysis
to find the best alternative, A,B, or C.
A B C
Initial cost $10,000 15,000 $12,000
Annual benefit 6,000 10,000 5,000
Salvage value 1,000 −2,000 3,000
Useful life 2 years 3 years 4 years
Use an analysis period of 12 years and 10% interest.
The formula I have for this question is:
6000(P/A,10%,2)+1000(P/F,10%,2)-10,000
Where do I add in the analysis period (12 years)??
1 answer