Question

5-38 Consider the two mutually exclusive projects in the table below. Salvage values represent the net proceeds​ (after tax) from disposal of the assets if they are sold at the end of each year. Both projects B1 and B2 will be available​ (or can be​ repeated) with the same costs and salvage values for an indefinite period.

B1				B2
n	Cash Flow		Salvage Value		Cash Flow		Salvage Value
0	−​$15,000		—		−​$30,000		—
1	−2,500		7,500		−2,700		6,500
2	−2,500		6,000		−2,700		3,500
3	−2,500		3,000		−2,700		1,000
4	−2,500		1,000		—		—
5	−2,500		500		—		—

(a) Assuming an infinite planning​ horizon, which project is a better choice at

MARR=10​%?

Use 15 years as the common analysis period.

The present worth for project B1 is ______ thousand.​ (Round to one decimal​ place.)

Answer 1

part 2:

The present worth for the project B1 is -48.5 thousands