4. There are two equipment alternatives for a critical process in a manufacturing department. Investment costs, annual costs, resale values, and useful lifetimes are given below. Your firm plans to operate the manufacturing department for a long time. Similar versions of each model will be available in the future, with similar costs and characteristics.

[10] Could you use NPV to select the preferred alternative? If yes, explain how, and sketch cash flow diagrams for each alternative (you dont need to show all the values). Dont compute any results. If no, briefly explain.

[10] With MARR = 0%, which is the preferred alternative, based on lower costs? Show work to justify your choice.

[5] With the MARR shown in the table, which is the preferred alternative, based on lower costs? Show work.

	MARR	0.15
Model	A	B
Investment	30,000	36,000
Resale (salvage)	6,000	7,200
Annual optg.	8,000	8,500
Lifetime, years	3	5

4. There are two equipment alternatives for a critical process in a manufacturing department. Investment costs, annual costs, resale values, and useful lifetimes are given below. Your firm plans to operate the manufacturing department for a long time. Similar versions of each model will be available in the future, with similar costs and characteristics a. [0] Could you use NPV to select the preferred alternative? If yes, explain how, and sketch cash flow diagrams for each alternative (you don't need to show all the values). Don't compute any results. If no, briefly explain. [10] With MARR-090, which is the preferred alternative, based on lower costs? Show work to justify your choice. [5] With the MARR shown in the table, which is the preferred alternative, based on lower costs? Show work. b. c. MARR o.15 Model Investment Resale (salvage) Annual optg. Lifetime, years 30,000 36,000 6,000 8,000 7,200 8,500 3