Question: Consider the three alternatives: Each alternative has a l0-year useful life and no salvage value . Based on a MARR of 15%, which alternative should

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.

A B $2035 Initial cost $1500 $1000 Annual benefit in each of first 5 years Annual benefit in each of subsequent5years 450 250 650 250 145 250

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A B A B C C B Cost 1500 1000 500 2035 1035 Annual Benefit first 5 years 250 250 0 65... View full answer

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