Question: Two mutually exclusive diesel generators are considered for purchase by a power generation company. Information relevant to compare the alternatives is summarized below: Use the

Two mutually exclusive diesel generators are considered for purchase by a power generation company. Information relevant to compare the alternatives is summarized below:

Use the IRR method to determine the better machine to be purchased. The MARR is 10% per year.

Generator A Generator B $80,000 $10,000 Capital $100,000 investment Market value at the end of service life Annual fuel and $35,000 $3,000 $5,000 maintenance expenses Service life 10 years 10 years

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a PW X 15 21493 PW Y 15 35291 Recommend Alternative Y b IRR on the incremental cash flo... View full answer

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