The tabulation of the incremental cash ?ows between alternatives A and B is shown on the next…

The tabulation of the incremental cash ?ows between alternatives A and B is shown on the next page. Alternative A has a 3-year life and alternative B a 6-year life. If neither alternative has a salvage value, what is ( a ) the ?rst cost of alternative A and ( b ) the ? rst cost of alternative B? Year Incremental Cash Flow (B – A), $ 0 –20,000 1 5,000 2 5,000 3 12,000 4 5,000 5 5,000 6 5,000

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