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Engineering Economics Present Worth

  1. Sep 25, 2010 #1
    1. The problem statement, all variables and given/known data

    Three different alternatives shown below are being considered. Assume that alternatives X and Z are replaced at the end of their lives


    Alt. X Alt. Y Alt. Z
    Initial Cost - 6000 1000 1500

    Annual Benefits - 810 125 230

    Useful Life - 20 infinite 10

    MARR = 12% for all

    Find the Net Present Worth for Alt. X, Alt. Y, and Alt. Z.

    2. Relevant equations

    capitalized cost A = iP

    F = A [((1 + i)n - 1))/i]

    P = A [((1 + i)n - 1))/i(1 + i)n]

    3. The attempt at a solution

    I found the NPW for Alt. Y

    P = (125/.12) - 1000 = 41.67

    I'm still stuck on X and Z.
     
  2. jcsd
  3. Sep 27, 2010 #2
    Nevermind. One of choices was a typo so I got it right.
     
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