11. An elective project is currently under review. The first alternative requires an initial investment of...

 

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11. An elective project is currently under review. The first alternative requires an initial investment of $60.000 for equipment. The annual revenues and expenses are expected to be $36,000 and $20,000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $14,000. The B/C of this alternative is 1.34. The second alternative requires an initial investment of $116,000 for equipment. The annual revenues and expenses are expected to be $38,000 and $10,000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $22,000. Find the preferred alternative using B/C analysis, assuming a MARR of 10%. Justify your conclusion. 11. An elective project is currently under review. The first alternative requires an initial investment of $60.000 for equipment. The annual revenues and expenses are expected to be $36,000 and $20,000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $14,000. The B/C of this alternative is 1.34. The second alternative requires an initial investment of $116,000 for equipment. The annual revenues and expenses are expected to be $38,000 and $10,000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $22,000. Find the preferred alternative using B/C analysis, assuming a MARR of 10%. Justify your conclusion.

Answer rating: 100% (QA)

A B 50 Alternative 2 51 Annual cash flows Annual revenues expenses 52 3800... View the full answer