For the following table, assume a MARR of 15% per year and a useful life for each

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For the following table, assume a MARR of 15% per year and a useful life for each alternative of eight years which equals the study period. The rank-order of alternatives from least capital investment to greatest capital investment is Z †’ Y †’ W †’ X. Complete the incremental analysis by selecting the preferred alternative. €œDo nothing€ is not an option.

Y- w W- X Z- Y A Capital -$550 -$250 -$400 investment A Annual cost savings A Market 70 90 15 100 50 200 value A PW(15%)

(a) Alternative W

(b) Alternative X

(c) Alternative Y

(d) Alternative Z

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 Economy

ISBN: 978-0133439274

16th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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