A B $20,000 $33,000 $45,000 Annual cash flows $10,000 $9,500 $10,500 $10,000 $18,000 Investment cost Salvage value Life in years $4,000 3 4

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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A dyeing and finishing plant is interested in acquiring a dyeing machine for the production of a new product. Three alternatives are being considered as
summarized below. Which alternative should be recommended if the plant’s
MARR (hurdle rate) is 15% per year using (a) the IRR method and (b) the annual worth method? 

A
B
$20,000 $33,000 $45,000
Annual cash flows $10,000 $9,500 $10,500
$10,000 $18,000
Investment cost
Salvage value
Life in years
$4,000
3
4
Transcribed Image Text:A B $20,000 $33,000 $45,000 Annual cash flows $10,000 $9,500 $10,500 $10,000 $18,000 Investment cost Salvage value Life in years $4,000 3 4
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