11.) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized below. a. If the MARR is 15% per year and the analysis period is 12 years, use the PW method to determine which alternatives are economically acceptable and which one should be selected. Capital investment Annual revenues less expenses Market value (end of useful life) Useful life (years) Mutually Exclusive Alternative I N $100,000 $152,000 $184,000 $220,000 15,200 31,900 35,900 41,500 10,000 0 15,000 20,000 12 12 12 12 b. If the total capital investment budget available is $200,000, which alternative should be selected?
11.) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized below. a. If the MARR is 15% per year and the analysis period is 12 years, use the PW method to determine which alternatives are economically acceptable and which one should be selected. Capital investment Annual revenues less expenses Market value (end of useful life) Useful life (years) Mutually Exclusive Alternative I N $100,000 $152,000 $184,000 $220,000 15,200 31,900 35,900 41,500 10,000 0 15,000 20,000 12 12 12 12 b. If the total capital investment budget available is $200,000, which alternative should be selected?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
11

Transcribed Image Text:11.) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized below.
a. If the MARR is 15% per year and the analysis period is 12 years, use the PW method to determine which
alternatives are economically acceptable and which one should be selected.
Capital investment
Annual revenues less expenses
Market value (end of useful life)
Useful life (years)
Mutually Exclusive Alternative
I
II
III
N
$100,000 $152,000 $184,000 $220,000
15,200 31,900 35,900 41,500
10,000
15,000 20,000
12
12
12
0
12
b. If the total capital investment budget available is $200,000, which alternative
should be selected?
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