Compare three alternatives on the basis of their capitalized costs at i = 10% per year.
 FIGURE 1.png)
For alternatives E and F, find AW, then divide by i using CC = AW/i
AWE = -50,000(A/P,10%,2) – 30,000 + 5000(A/F,10%,2)
= -50,000(0.57619) – 30,000 + 5000(0.47619)
= $-56,428.60
CCE = 56,428.60/0.10
= $-564,286
AWF = -300,000(A/P,10%,4) – 10,000 + 70,000(A/F,10%,4)
= -300,000(0.31547) – 10,000 + 70,000(0.21547)
= $-89,558.10
CCF = 89,558.10/0.10
= $-895,581
AWG = -900,000 - 3000/0.10
= $-930,000
Select alternative E
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