Consider the following alternatives: Initial cost Uniform annual benefits Each alternative has a l0-year useful life and

Question:

Consider the following alternatives: Initial cost Uniform annual benefits

в A Initial cost $300 $600 $200 35 Uniform annual benefits 41 98

Each alternative has a l0-year useful life and no salvage value. If the MARR is 8%, which alternative should be selected?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...