3. Show complete solution please A firm is considering the purchase of a new machine to increase the output of an existing production process. If each of thesemachines provides the same service over their useful lives and the MARR is 12%, which machine would be selected on the basis ofPW and apply repeatability assumption?Alternative AAlternative BAlternative CInitial Investment$75,000$20,435$75,000$16,212$100,000$22,675Net AnnualRevenuesMarket Value at$15,000$12,000$25,000End of Useful LifeUseful Life5 yearsб years10 years

GIVEN A firm is considering the purchase of a new machine to increase the output of an existing…

Alternative A Alternative B Alternative C $75,000 $20,435 $75,000 $16,212 $100,000 $22,675 Initial Investment Net Annual Revenues Market Value at $15,000 $12,000 $25,000 End of Useful Life Useful Life 5 years 6 years 10 years

Alternative A Alternative B Alternative C $75,000 $20,435 $75,000 $16,212 $100,000 $22,675 Initial Investment Net Annual Revenues Market Value at $15,000 $12,000 $25,000 End of Useful Life Useful Life 5 years 6 years 10 years

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

3. Show complete solution please

A firm is considering the purchase of a new machine to increase the output of an existing production process. If each of these
machines provides the same service over their useful lives and the MARR is 12%, which machine would be selected on the basis of
PW and apply repeatability assumption?
Alternative A
Alternative B
Alternative C
Initial Investment
$75,000
$20,435
$75,000
$16,212
$100,000
$22,675
Net Annual
Revenues
Market Value at
$15,000
$12,000
$25,000
End of Useful Life
Useful Life
5 years
б years
10 years

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