The following data is available for three different alternatives. Assume an interest rate of 9% per year, compounded annually.
Alternative A Alternative B Alternative C
Initial Cost 7,000 8,600 14,000
Annual Benefit 1,375 793 6,007
Useful Life (yrs) infinite 18 9
Alternatives B and C are replaced at the end of their useful lives with identical replacements. Using present worth analysis, find the best alternative.
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