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 = $560 e) Both alternatives are equivalent at this MARR.
A firm is considering two project alternatives with details described in the following table: Alternative Initial investment A B 10000 20000 Annual profit ($) 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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Question
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