Question: Question #6 10 points) Alternative A has a first cost of $10,000, an annual operating cost of $5,000 and a salvage value of $2,000. Alternative
Question #6 10 points) Alternative A has a first cost of $10,000, an annual operating cost of $5,000 and a salvage value of $2,000. Alternative B has an initial cost of $25,000, an annual opernting cost of $1.000 and a salvage value of $12,000. If the life time for Alternative A is two years and that of Altermativc B is four years. a) Write the equation for the incremental rate of return based on the Present Worth Analysis (do not solve the equation) b) Ifai* determined in part (a) is 30% and the MARR is 20% per year, which altemative should be selected? A-s
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