Question: Three (3) mutually exclusive alternatives are being considered for the production equipment at a toilet tissue paper factory. The estimated cash flows for each alternative

  1. Three (3) mutually exclusive alternatives are being considered for the production equipment at a toilet tissue paper factory. The estimated cash flows for each alternative are given here. (All cash flows are in thousands.).
    1. Use the EUAW (Equivalent Uniform Annual Worth) method to determine which equipment alternative, if any should be selected? The firms MARR is 18%. Cash flow diagrams must be included.

A

B

C

Capital investment

2000

4200

7000

Annual revenues

3200

6000

8000

Annual costs

2100

4000

5100

Salvage value

100

420

600

Useful life (years)

5

10

10

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