Question 1 Three different alternatives shown in the table below are being considered by Kal Tech

Engineering systems. Assume that alternatives X and Z are replaced at the end of their lives
(replaceability assumption). The NPW of alternative X is ____________.
Data
Alternative X
Alternative Y
Alternative Z
Initial Cost
$6,000
$1,000
$1,500
Uniform Annual Benefits
$810
$125
$ 230
Useful Life in Years
20
Infinite
10
MARR
12%
$5
$53.4
$49.89
$84.5
Question 2 A sum of $25,000 is deposited into a savings account, which pays 8% interest compounded
semiannually. Equal annual withdrawals are to be made from the account, beginning 1 year from now and
continuing forever. The maximum amount that can be withdrawn at the end of each year is
approximately equal to ____________.
$2,250
$2,000
$2,300
$2,040
Question 3 Four different alternative designs as shown in table below are available for a public interest
project. Determine using the capitalized cost approach which alternative is the most desirable one. MARR
=5%
Alternative X
Alternative Y
Alternative Z
Do Nothing
Initial Cost
$10M
$28M
$5M
0
Benefit/Year
$1M
$1.8M
$1M
0
Life in Years
15
30
10
0
Alternative X
Alternative Y
Alternative Z
Do nothing
Question 4 A federal government contractor is considering buying a software package at a cost of
$450,000. The software company will charge an annual maintenance fee of $25,000 payable at the
beginning each year including the very first year. The contracting company is bidding on a four-year
government contract. The present worth of the software that should be included in the bid at an interest
rate of 20% is ______.
$550,000
$517,346
$509,050
$527,650
Question 5 A bridge in a metropolitan area is being considered at a cost of $120M. The annual
maintenance cost is estimated to be $100K. A major renovation at a cost of $50M is required every 100
years. What is the capitalized cost of the bridge at an interest rate of 5%?
$122M
$12.38M
$122.38M
$12M