Unformatted text preview: s. P l e ase , st a t e c l e a r l y you r assu m p t ions.
We first realize that the useful life of Alternative A is smaller than the study period of 25 years.
We repeat the costs of alternative A from year 10 to year 25, and then use the estimated market
value of $1,000 at the end of year 25. We then obtain the following cash flow diagram
5,000 1 10 1,000
12,000 25 12,000 We can now compare the two alternatives using the FW method. We have Homework # 8 Solutions
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This note was uploaded on 01/20/2012 for the course INDUSTRIAL 343 taught by Professor Capponi during the Spring '11 term at Purdue.
- Spring '11