Consider these two alternatives.Alternative 2$6,400$2,000$520$1,3008 years12 yearsa. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initialdecision based on these data would be reversed? The annual MARR is 18% per year.b. Determine the life of Alternative 1 for which the AWs are equal.Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.More InfoN12345a. The capital investment of Alternative 2 would have to be $ or less for the initial decision to be reversed. (Round to the nearest dollar.)6789101112131415TactorTo Find FGiven PFIP1.18001.39241.64301.93882.28782.69963.18553.75894.43555.23386.17597.28768.599410.147211.9737Vorurt actorTo Find PGiven FPIF0.84750.71820.60860.51580.43710.37040.31390.26600.22550.19110.16190.13720.1163Capital investmentAnnual revenuesAnnual expensesEstimated market valueUseful life0.09850.0835TacioTTo Find FGiven AFIA1.00002.18003.57245.21547.15429.442012.141515.327019.085923.521328.755134.931142.218750.818060.9653WORLIFT actorTo Find PGiven APIA0.84751.56562.17432.69013.1272Alternative 1$4.300$1,550$400$6503.49763.81154.07764.30304.49414.65604.79324.90955.00815.0916CTactorTo Find AGiven FAIF1.00000.45870.27990.19170.13980.10590.08240.06520.05240.04250.03480.02860.02370.01970.0164TactorTo Find AGiven PAIP1.18000.63870.4599Q0.37170.31980.28590.26240.24520.23240.22250.21480.20860.20370.19970.1964

Equivalent annual worth:Equivalent Annual Worth (EAW) is a financial metric that is used to…

Alternative 2 $6,400 $2,000 $520 $1,300 8 years 12 years Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial ecision based on these data would be reversed? The annual MARR is 18% per year. . Determine the life of Alternative 1 for which the AWs are equal. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. Capital investment Annual revenues Annual expenses Estimated market value Useful life Alternative 1 $4,300 $1,550 $400 $650

Alternative 2 $6,400 $2,000 $520 $1,300 8 years 12 years Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial ecision based on these data would be reversed? The annual MARR is 18% per year. . Determine the life of Alternative 1 for which the AWs are equal. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. Capital investment Annual revenues Annual expenses Estimated market value Useful life Alternative 1 $4,300 $1,550 $400 $650

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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