A firm is considering two project alternatives with details described in the following table: Alternative Initial investment A B 10000 20000 Annual profit ($) 3000 5000 Useful life(years) 8 12 Salvage value($) 1000 2000 Imputed market value at EYO 5($) 2000 8000 Assume that the MARR=12%. 16. If repeatability applies, which of the following statements is TRUE about the alternatives: a) Alternative A is better than alternative B with extra annual profit = $787 b)Alternative B is better than alternative A with extra annual profit = $787 c) Alternative A is better than alternative B with extra annual profit = $560 d)Alternative B is better than alternative A with extra annual profit = $560 e) Both alternatives are equivalent at this MARR.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
Problem 2.2CE
Question
not use ai please
A firm is considering two project alternatives with details described in the following
table:
Alternative
Initial investment
A
B
10000
20000
Annual profit ($)
3000
5000
Useful life(years)
8
12
Salvage value($)
1000
2000
Imputed market
value at EYO 5($)
2000
8000
Assume that the MARR=12%.
16. If repeatability applies, which of the following statements is TRUE about the
alternatives:
a) Alternative A is better than alternative B with extra annual profit = $787
b)Alternative B is better than alternative A with extra annual profit = $787
c) Alternative A is better than alternative B with extra annual profit = $560
d)Alternative B is better than alternative A with extra annual profit = $560
e) Both alternatives are equivalent at this MARR.
Transcribed Image Text:A firm is considering two project alternatives with details described in the following table: Alternative Initial investment A B 10000 20000 Annual profit ($) 3000 5000 Useful life(years) 8 12 Salvage value($) 1000 2000 Imputed market value at EYO 5($) 2000 8000 Assume that the MARR=12%. 16. If repeatability applies, which of the following statements is TRUE about the alternatives: a) Alternative A is better than alternative B with extra annual profit = $787 b)Alternative B is better than alternative A with extra annual profit = $787 c) Alternative A is better than alternative B with extra annual profit = $560 d)Alternative B is better than alternative A with extra annual profit = $560 e) Both alternatives are equivalent at this MARR.
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