The following mutually exclusive investment alter-natives have been presented to you. (See Table P6-82.) The life of

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The following mutually exclusive investment alter-natives have been presented to you. (See Table P6-82.) The life of all alternatives is 10 years. Using a MARR of 15%, the PW of the investment in A when compared incrementally to B is most nearly:

(a) ˆ’$69,000

(b) ˆ’$21,000

(c) $20,000

(d) $61,000

(e) $53,000


Table P6-82:

Capital investment Annual expenses Annual revenues Market value at EOY 10 IRR $40,000 25,000 38,000 10,000 30.8% $60,000

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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