ABC Electronics must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a 10-year leife with no scrap value. The supplier has given JT several purchase alternatives. The first is to purchase the equipment for $850,000 (Option A). The second is to pay for the equipment in 10 equal installments of $135,000 each, starting one year from now (Option B). The third is to pay $215,000 now and $95,000 at the end of each year for the next 10 years (Option C). Which alternative should JT choose if their MARR is 11% per year? Use an IRR comparison approach. Where JT Electronics must purchase one of the pieces of equipment, do not consider the do nothing option (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):. Answers entered using text are case sensitive! Loing Number

ABC Electronics must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a 10-year leife with no scrap value. The supplier has given JT several purchase alternatives. The first is to purchase the equipment for $850,000 (Option A). The second is to pay for the equipment in 10 equal installments of $135,000 each, starting one year from now (Option B). The third is to pay $215,000 now and $95,000 at the end of each year for the next 10 years (Option C). Which alternative should JT choose if their MARR is 11% per year? Use an IRR comparison approach. Where JT Electronics must purchase one of the pieces of equipment, do not consider the do nothing option (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):. Answers entered using text are case sensitive! Loing Number

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

ABC Electronics must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a
10-year leife with no scrap value. The supplier has given JT several purchase alternatives. The first is to purchase the equipment for $850,000 (Option A).
The second is to pay for the equipment in 10 equal installments of $135,000 each, starting one year from now (Option B). The third is to pay $215,000 now
and $95,000 at the end of each year for the next 10 years (Option C). Which alternative should JT choose if their MARR is 11% per year? Use an IRR
comparison approach. Where JT Electronics must purchase one of the pieces of equipment, do not consider the do nothing option (Perform all calculations
using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):.
Answers entered using text are case sensitive!
Using the defender/challenger approach, what is the Incremental IRR between your initial best option and the first challenger? Number
Which option is the best after the first Defender/Challenger analysis? (Enter 'A', 'B', or 'C')
las
%
Using the defender/challenger approach, what is the Incremental IRR between your new best option (the winner of the first challenge) and the second
challenger? Number
Which option is the best after the first Defender/Challenger analysis? (Enter 'A', 'B', or 'C')

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