A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are as follows: A B C Installed cost $8000 $12000 $16000 Uniform annual benefit $1600 $1750 $2050 Useful life, in years 10 20 20 For each alternative, the salvage value at the end of useful life is zero. At the end of 10 years, Alternative A could be replaced by another A with identical cost and benefits. Assuming that "Do-Nothing" is not an option, the choice table for interest rates from 0% to 100% for these alternative will be: Lower Bound (percentage with 1 decimal, or N/A) Minimum attractive Rate of Return Upper Bound (percentage with 1 decimal, or N/A) Selected alternative (A, B, C, D, or N/A) 0.0% < MARR ≤ % % < MARR ≤ % % < MARR ≤ % % < MARR ≤ %
A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are as follows: A B C Installed cost $8000 $12000 $16000 Uniform annual benefit $1600 $1750 $2050 Useful life, in years 10 20 20 For each alternative, the salvage value at the end of useful life is zero. At the end of 10 years, Alternative A could be replaced by another A with identical cost and benefits. Assuming that "Do-Nothing" is not an option, the choice table for interest rates from 0% to 100% for these alternative will be: Lower Bound (percentage with 1 decimal, or N/A) Minimum attractive Rate of Return Upper Bound (percentage with 1 decimal, or N/A) Selected alternative (A, B, C, D, or N/A) 0.0% < MARR ≤ % % < MARR ≤ % % < MARR ≤ % % < MARR ≤ %
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are as follows:
| A | B | C | |
| Installed cost | $8000 | $12000 | $16000 |
| Uniform annual benefit | $1600 | $1750 | $2050 |
| Useful life, in years | 10 | 20 | 20 |
For each alternative, the salvage value at the end of useful life is zero. At the end of 10 years, Alternative A could be replaced by another A with identical cost and benefits.
Assuming that "Do-Nothing" is not an option, the choice table for interest rates from 0% to 100% for these alternative will be:
|
Lower Bound (percentage with 1 decimal, or N/A) |
Minimum attractive |
Upper Bound (percentage with 1 decimal, or N/A) | Selected alternative (A, B, C, D, or N/A) |
| 0.0% | < MARR ≤ | % | |
| % | < MARR ≤ | % | |
| % | < MARR ≤ | % | |
| % | < MARR ≤ | % |
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