Three mutually exclusive alternatives are being evaluated, and their costs and revenues are listed in Table P6-1. (6.4)
a. If the MARR is 20% per year and the analysis period is 10 years, use the PW method to determine which alternatives are economically acceptable and which one should be selected.
b. If the total capital investment budget available is $500,000, which alternative should be selected?
c. Which rule (Section 6.2.2) applies? Why?
Table 6.1

Transcribed Image Text:

TABLE P6-1 Table for Problem 6-1 Alternative 1 Alternative 2 Alternative 3 Capital investment Annual revenues Annual expenses Market value Useful life (years) $300,000 $200,000 $50,000 50,000 10 $450,000 $100,000 $50,000 $50,000 10 $600,000 $200,000 $100,000 $100,000 10