Consider two alternatives: Assume that Alt. B is not replaced at the end of its useful life.

Question:

Consider two alternatives:

A B Cost $500 75 $300 75 Uniform annual benefit Useful life, in years Infinity

Assume that Alt. B is not replaced at the end of its useful life. If the MARR is 10%, what must be the useful life of B to make Alternatives A and B equally desirable?

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...