The cash flow diagram of Alternative-2 is shown in Fig. 2.18.

Fig. 2.18 Cash flow diagram of Alternative-2

The equivalent future worth of the Alternative-2 i.e. FW₂ is calculated as follows;

Now putting the values of different compound interest factors in the above expression results in the following;

FW₂ = Rs.647848

Comparing the equivalent future worth of the alternatives, it is observed that Alternative-1 shows higher positive equivalent future worth as compared to Alternative-2. Thus Alternative-1 will be selected for purchase of the road roller.