Three mutually exclusive alternatives are being considered: At the end of its useful life, an alternative is

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Three mutually exclusive alternatives are being considered:

A Initial cost $500 $400 $300 Benefit at end of the first year Uniform benefit at end of 200 200 200 125 100 100 Subsequ

At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected:

(a) Based on the payback period?

(b) Based on benefit-cost ratio analysis?

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...

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Engineering Economics

ISBN: 9780195168075

9th Edition

Authors: Ted G. Feller

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Question Posted: Feb 25, 2010 06:02 AM

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Three mutually exclusive alternatives are being considered: At the end of its useful life, an alternative is

Question:

A Initial cost $500 $400 $300 Benefit at end of the first year Uniform benefit at end of 200 200 200 125 100 100 Subsequent years Useful life, in years 4

Step by Step Answer:

a Payback A 4 years Payback B 26 years Payback C 2 ye...View the full answer

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