The costs of three alternatives for a small water supply system are being evaluated: Option...
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The costs of three alternatives for a small water supply system are being evaluated: Option A has an initial cost of $100,000, an annual operating cost of $50,000, upgrading costs at year 4 of $30,000 and year 6 of $40,000, a salvage value of $30,000, and a design life of 10 years. Option B has an initial cost of $140,000 and an annual operating cost of $30,000. There is no salvage value, and the design life is 10 years. Option C has an initial cost of $350,000, a salvage value of $50,000, and annual operating costs of $15,000. It has an expected design life of 20 years. The MARR is 12%. 1. Select the least cost alternative using Present Worth analysis. 2. Select the least cost alternative using Equivalent Uniform Annual Cost analysis 3. Select the least cost alternative using Rate of Return analysis
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