1- a)Three mutually exclusive design alternatives are beimg considered. The estimated cah flows for each alternative...

 

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1- a)Three mutually exclusive design alternatives are beimg considered. The estimated cah flows for each alternative are given below. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. A decision- maker can select one of these altematives or decide to select none of them. Make a recommendation using the PW method. Which altemative would you select? (10 points) B Investment cost Annual expenses Annual revenues 28000 USD 55000 USD 40000 USD 15000 USD 13000 USD 22000 USD 23000 USD 28000 USD 32000 USD Market value at the end of useful life Useful life 6000 USD 10 years 8000 USD 10 years 10000 USD 10 years b) The Doinion Freight Compny has invested 50000 USD in a new sorting machine that is expected to produce a retum of 7500 USD per year for the next 10 years. At a 7% annual interest rate, is this investment worthwhile? (10 points) c) We solved the Drive Tek Problem in our lecture. Please solve this problem by explaining each branch of the decision tree. Please do NOT draw a decision tree. Please explain the solution in writing. (10 points) 1- a)Three mutually exclusive design alternatives are beimg considered. The estimated cah flows for each alternative are given below. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. A decision- maker can select one of these altematives or decide to select none of them. Make a recommendation using the PW method. Which altemative would you select? (10 points) B Investment cost Annual expenses Annual revenues 28000 USD 55000 USD 40000 USD 15000 USD 13000 USD 22000 USD 23000 USD 28000 USD 32000 USD Market value at the end of useful life Useful life 6000 USD 10 years 8000 USD 10 years 10000 USD 10 years b) The Doinion Freight Compny has invested 50000 USD in a new sorting machine that is expected to produce a retum of 7500 USD per year for the next 10 years. At a 7% annual interest rate, is this investment worthwhile? (10 points) c) We solved the Drive Tek Problem in our lecture. Please solve this problem by explaining each branch of the decision tree. Please do NOT draw a decision tree. Please explain the solution in writing. (10 points)