1. Three mutually exclusive alternatives are being evaluated, and their cost and revenues are listed in Table...
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Question:
1. Three mutually exclusive alternatives are being evaluated, and their cost and revenues are listed in Table 6-1.
(1) If MARR is 20% per year and the analysis period is 10 years, use the PW method to determine which alternatives are economically accepted and which one should be selected?
(2) If the total capital investment budget available is $50,000, which alternative should be selected?
Table 6-1
| Alternative 1 | Alternative 2 | Alternative 3 |
Capital investment | $300,000 | $450,000 | $600,000 |
Annual revenue | $200,000 | $100,000 | $200,000 |
Annual cost | $50,000 | $50,000 | $100,000 |
Market value at end | $50,000 | $50,000 | $100,000 |
Useful life (years) | 10 | 10 | 10 |
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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