A thermoplastic film manufacturer is trying to decide between 5 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. Select the best alternative by performing an IRR incremental analysis. Justify your answer.
A thermoplastic film manufacturer is trying to decide between 5 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. Select the best alternative by performing an IRR incremental analysis. Justify your answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A thermoplastic film manufacturer is trying to decide between 5 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the
Select the best alternative by performing an IRR incremental analysis.
Justify your answer.
Transcribed Image Text:Initial Costs
Annual
expenses
Annual
revenue
A B C D E
$17,000$13,500$15,500
$6,550 $7,000 $8,000 $7,000 $11,000
$12,500$17,000
$9,125 $9,000 $10,000 $9,500 $13,500
Lifetime(years) 9 9
IRR
9 9
9
6.69% 6.18% 3.10% 13.70% 6.01%
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