Question: Given the financial data for four mutually exclusive alternatives in the table below, A B C D First cost $18,000 $40,000 $21,200 45,000 O &M

Given the financial data for four mutually exclusive alternatives in the table below,

A

B

C

D

First cost

$18,000

$40,000

$21,200

45,000

O &M Cost/ year

2,600

5,000

3,900

11,000

Benefit/year

7,500

16,000

11,500

25,000

Salvage value

2,000

6,000

6,000

12,000

Life in years

4

Use a Rate of Return Analysis to solve for the following:

  • Which alternative should be chosen using an MARR of 9%? Mathematical solution
  • Create a choice table from 0 25%.
  • Create a graphical solution to the problem indicating which alternative should be chosen for interest rates from 0 20%. Make sure your graph has all proper labels including the appropriate choices for the Rate of Returns shown in the graph. The graph should be on its own page and not embedded.

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