3.Sanders Corp. is considering threemutually exclusive alternatives forone of their production facilities.The cash flow details, which indicatethe expected revenues for eachpossible capital investment (option)are shown in thousands of dollars inthe table provided.Year012345$6GAGA$$$$LA CA$Option #1$(8.00) $GAGA2.60 $2.60 $2.60$2.60 $2.60 $2.60$Option #2Option #3Assuming a MARR rate of 12.0% peryear and based on a rate of returnanalysis which (if any) of thesealternatives should be implemented?What is the discounted payback period and annual worth of the preferred alternative (if any wasselected).(13.90) $4.05 $4.05 $4.05 $4.05 $4.05 $4.05 $(24.00)3.006.009.0012.0015.00

Year Option #1 Option #2 Option #3 0 -8 -13.9 -24 1 2.6 4.05 0 2 2.6 4.05 3 3 2.6 4.05 6 4…

3. Sanders Corp. is considering three mutually exclusive alternatives for one of their production facilities. The cash flow details, which indicate the expected revenues for each possible capital investment (option) are shown in thousands of dollars in the table provided. Year Option #1 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ Option #2 (8.00) $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ (13.90) $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ Option #3 (24.00) 3.00 6.00 9.00 12.00 15.00 Assuming a MARR rate of 12.0% per year and based on a rate of return analysis which (if any) of these alternatives should be implemented? What is the discounted payback period and annual worth of the preferred alternative (if any was selected).

3. Sanders Corp. is considering three mutually exclusive alternatives for one of their production facilities. The cash flow details, which indicate the expected revenues for each possible capital investment (option) are shown in thousands of dollars in the table provided. Year Option #1 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ Option #2 (8.00) $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ (13.90) $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ Option #3 (24.00) 3.00 6.00 9.00 12.00 15.00 Assuming a MARR rate of 12.0% per year and based on a rate of return analysis which (if any) of these alternatives should be implemented? What is the discounted payback period and annual worth of the preferred alternative (if any was selected).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

3.
Sanders Corp. is considering three
mutually exclusive alternatives for
one of their production facilities.
The cash flow details, which indicate
the expected revenues for each
possible capital investment (option)
are shown in thousands of dollars in
the table provided.
Year
0
1
2
3
4
5
$
6
GAGA
$
$
$
$
LA CA
$
Option #1
$
(8.00) $
GAGA
2.60 $
2.60 $
2.60
$
2.60 $
2.60 $
2.60
$
Option #2
Option #3
Assuming a MARR rate of 12.0% per
year and based on a rate of return
analysis which (if any) of these
alternatives should be implemented?
What is the discounted payback period and annual worth of the preferred alternative (if any was
selected).
(13.90) $
4.05 $
4.05 $
4.05 $
4.05 $
4.05 $
4.05 $
(24.00)
3.00
6.00
9.00
12.00
15.00

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