1.Consider costs positive.

Find the NAC of the wooden bridge.

NAC = 25000(A/P, .1, 20) + 3000 = 25000*.1175 + 3000 = 2937.5+ 3000 = 5937.5

Find the initial cost of the steel bridge to equal this annual cost.

NAC = P(A/P, .1, 35) + 7000(A/F, .1, 35) = 5937.5

NAC = P*0.1037 + 7000*0.0037 = 5937.5

P = (5937.- 25.90)/0.1037 = 5911.10/0.1037 = 57001.9286

The bid can be for \$57,000 and still remain competitive.

2. At 8%

NAC A = 750(A/P, .08, 12) + 100 + 50(A/G, 0.08, 12) =

= 750*0.13270 + 100 + 50*4.5957 = 99.52500+ 100 + 229.7850 = 429.31000

NAC B = 1200(A/P, 0.08, 8) + 200 + 400(A/F, 0.08, 8) = 446.35

NAC C = [(2000 + 600(P/F, 0.08, 4)](A/P, 0.08, 8) = 424.77

Choose C.

For a 24 year study period.

NPC A = 4520, NPC B = 4699, NPC C = 4472,

3.

Cement: NAC = 5000(A/P, 0.2, 20) + 500(A/F, .2, 5) + 500(A/F,.2,20)

= 5000*.2054 + 500*.1344 + 1000*0.0054 = 1027.+67.20 + 5.40 = 1099.60

Lawn Service: NAC = 1000(F/P, .2, 1) = 1000(1.2) = 1200

Son: NAC = 1500(A/P, .2, 3) + 200 = 1500*.4747 + 200 = 712.05 + 200 = 912.05.

4.

Considering costs positive.

NAC M = 1000(A/P, 0.12, 5) + 3000 = 3277.4

NAC A = (4000 - 1000)(A/P, 0.12, 3) + 1000(0.12) + 1000 = 2369.