Automated Welding Services, Inc. (AWS) business has been growing and they need to raise their automation to
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Automated Welding Services, Inc. (AWS) business has been growing and they need to raise their automation to the next level. They have collected data on five alternative machines/processes for which the data is shown below. Only a single alternative will be selected. AWS uses a 5-year time horizon for project justifications. Submit your solution in a spreadsheet.
- Determine which will offer the largest internal rate of return for AWS.
- Determine using the internal rates of return criterion with an incremental analysis which will offer the largest monetary benefit to AWS if their MARR is 12%.
- What is the difference between parts a and b?
Altern- ative | Investment in year 0 | Annual Cash Flow | Salvage value in last year |
A1 | $50,000 | $18,000 | $0 |
A2 | $250,000 | $85,000 | $75,000 |
A3 | $350,000 | $110,000 | $175,000 |
A4 | $600,000 | $150,000 | $400,000 |
A5 | $800,000 | $175,000 | $600,000 |
Related Book For
Financial accounting
ISBN: 978-0132751124
9th edition
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
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