The alternatives for an engineering project to recover most of the energy presently being lost in the

Question:

The alternatives for an engineering project to recover most of the energy presently being lost in the primary cooling stage of a chemical processing system have been reduced to three designs. The estimated capital investment amounts and annual expense savings are as follows:

a After year one, the annual savings are estimated to increase at the rate of 6% per year.
b After year one, the annual savings are estimated to increase $150 per year.
c Uniform sequence of annual savings.
Assume that the MARR is 12% per year, the study period is six years, and the market value is zero for all three designs. Apply an equivalent-worth analysis method to determine the preferred alternative.

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...