Question

6) The AW values of three alternatives are $-50,000 for A, $-35,000 for B, and $-48,000 for C. On the basis of these AW values, the correct decision is to:

a. Select alternative A

b. Select alternative B

c. Select alternative C

d. Select the do-nothing alternative

7) A grateful donor wishes to start an endowment at her alma mater that will provide scholarship money of $40,000 per year beginning now (time 0) and continue indefinitely. If the funds earn 10% per year, the amount that she must donate now is:

a. $340,000

b. $400,000

c. $493,000

d. $440,000

8) Given that i = 10% and the data below: Alternative Project A Project B First Cost($) -50,000 -80,000 Annual Cost ($/yr) -20,000 -10,000 Salvage value ($) 10,000 25,000 Life, years 3 6 The cost recovery for project A and B are respectively;

a. CR=$25,128 for project A and CR=$37,084 for project B

b. CR=$15,128 for project A and CR=$17,084 for project B

c. CR=$17,084 for project A and CR=$15,129 for project B

d. CR=$43,126 for project A and CR=$31,600 for project B Questions

9-11. The four cost€ alternatives described below are being evaluated.

9) If the proposals are independents, which one(s) should be selected with MARR =18%?

a. Alternative A, B, C, and D

b. Alternative B, C, and D

c. Only Alternative B

d. Only Alternative B and C

10) If the proposals are mutually exclusive, which should be selected with MARR=15%?

a. Alternative A, B, C, and D

b. Only alternative B

c. Alternative B and C

d. Only alternative C

11) If the proposals are mutually exclusive, which should be selected with MARR=10%?

a. Select alternative D

b. Select alternative C

c. Select alternative B

d. Select all alternatives A, B, C, and D