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A project engineer is assigned to provide computer networking and internet access to an office building. After research various equipment suppliers’ two alternatives are detailed for further economic analysis. Alternative A is a wireless network with lower acquisition costs but higher operational costs. Alternative B is a wired network with low operational costs but higher equipment and installation costs. The costs associated with each of two alternatives are outlined below.
Maintenance and Operation
Q. Using the information provided above, determine which alternative to recommend using Present Worth analysis. Conduct the analysis twice, once for the least common multiple of the service lives and once using a five year study period. Assume a 10% interest rate.