Consider the three alternatives: Each alternative has a l0-year useful life and no salvage value . Based

Question:

Consider the three alternatives:

A B $2035 Initial cost $1500 $1000 Annual benefit in each of first 5 years Annual benefit in each of subsequent5years 45

Each alternative has a l0-year useful life and no salvage value. Based on a MARR of 15%, which alternative should be selected? Where appropriate, use an external interest rate of 10% to transform a cash flow to one sign change before proceeding with rate of return analysis.

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...