The following problem is based on the following cash flows for alternatives A and B at an interest rate of 10% per year.
 FIGURE 1.png)
You have been asked to compare the alternatives on the basis of a present worth comparison. The PW of alternative A is closest to:
(a) $?724,320
(b) $?530,520
(c) $?388,950
(d) $?72,432
LCM is ?; first find AW and then divide by i
AWA = -90,000(A/P,10%,5) -50,000 + 8000(A/F,10%,5)
= -90,000(0.26380) -50,000 + 8000(0.16380)
= -$72,432
CCA = -72,432/0.10
= $-724,320
Answer is (a) $?724,320
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