Question: There are three mutually exclusive alternatives, as vendors to outsource a project, with the following cash flow and useful life. Which of these three alternatives

There are three mutually exclusive alternatives, as vendors to outsource a project, with the following cash flow and useful life. Which of these three alternatives would you recommend to be selected? The MARR is 10% per year.

Vendor 1

Vendor 2

Vendor 3

First Cost

$60,000

$35,000

$25,000

Annual operating and maintenance cost

$3,000 every 4 years

$1,000 per year

$2,000 in yr 1 and it increases by $200 every year thereafter

Salvage value

$10,000

$4,000

$3,000

Useful life, years

8

2

4

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