Al-Fanar Company has to select one of three different solutions. 

Solution A has a first cost of SR40,000, an annual operating cost of $9000, and a service life of 2 years. 

Solution B costs SR80,000 to buy and will have an annual operating cost of $6000 over its 4-year service life. 

Solution C costs SR130,000 initially with an annual operating cost of $4000 over its 8-year life. 

If solution C is the only one has future return estimated $12,000. Which solution should be selected? Use LCM method at an interest rate of 10% per year.

Answer rating: 100% (QA)

Using LCM Equate the Life of all solutions Ie 248 here least coomon factor is 8 N... View the full answer