Present Worth In Exclusive Choice

Question:

Year A B
0 -10 -10
1 12 0
2 0 0
3 0 0
4 0 0
5 0 15
  1. Which assets would you get if MARR = 15%? MARR = 1%?
  2. Which asset would you get if MARR = 15%? MARR = 1%?

Answer:

MARR = 15% MARR = 1%
Assets Just A: A=$-10+12/1.15 = .434$ B=$-10+15/1.15^5 = -2.5$ A & B: A=$-10+12/1.01 = 1.9$ B=$-10+15/1.01^5 = 4$
Asset Just A: A=$-10+12/1.15 = .434$ B=$-10+15/1.15^5 = -2.5$ Just B: A=$-10+12/1.01 = 1.9$ B=$-10+15/1.01^5 = 4$
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