For the following mutually exclusive design alternatives for a production line perform the following calculations: Use...
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For the following mutually exclusive design alternatives for a production line perform the following calculations: Use 12% interest rate. . Initial investment Design 1 Useful life -28,000 Annual revenues Market value at the end of useful life 2,500 5,500 10 Design 2 -16,000 3,300 0 10 Design 3 -23,000 4,800 0 10 a. (20) Calculate the benefit-cost ratio of each design. b. (20) Identify the most promising alternative using benefit-cost ratio analysis. For the following mutually exclusive design alternatives for a production line perform the following calculations: Use 12% interest rate. . Initial investment Design 1 Useful life -28,000 Annual revenues Market value at the end of useful life 2,500 5,500 10 Design 2 -16,000 3,300 0 10 Design 3 -23,000 4,800 0 10 a. (20) Calculate the benefit-cost ratio of each design. b. (20) Identify the most promising alternative using benefit-cost ratio analysis.
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SOLUTION a To calculate the benefitcost ratio of each design we need to determine the present value ... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0133439274
16th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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