Question

The Cutter Company is upgrading its processing plant by installing a new stripping line. There are two mutually exclusive alternatives being considered having unequal project lives. Use the present worth (PW) method to evaluate the two projects. MARR = 10%

EOY	Alternative 1	PW	Alternative 2	PW
0	-80,000		-95,000
1	35,000		20,000
2	33,000		22,000
3	40,000		25,000
4			25,000
5			25,000
6			35,000

Total Present Worth (Alternative 1) =

Total Present Worth (Alternative 2) =

Answer 1