Fiesta Foundry is considering a new furnace that will make them more efficient. Three alternative furnaces are
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Question:
Fiesta Foundry is considering a new furnace that will make them more efficient. Three alternative furnaces are being evaluated.
Perform an incremental analysis of these alternatives using the IRR method for each increase in cash flows.
The MARR is 12% per year
initial investment | 450,000 $ | 400,000 $ | 300,000 $ |
Annual Revenues* | 80,000 $ | 80,000 $ | 80,000 $ |
Annual price* | 10,000 $ | 8,000 $ | 13,000 $ |
recovery value | 50,000 $ | 40,000 $ | 35,000 $ |
lifetime of the asset | 15 years | 15 years | 15 years |
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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