Problem 5.73
Given the following data, use present worth analysis to find the
best alternative, A, B, or C.
Use an analysis period of 12 years and 15% interest.
Please show complete solution procedure, and include
cash flow diagram(s) for each machine.
Machine                        
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
(yrs)             
2
years                3
years                
4 years