Consider the three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions (repeatability / co terminated) you make in your analysis. Which alternative should be chosen? A B C Capital investment $2,000 $8,000 $20,000 Annual revenues less 600 2,200 3,600 expenses Useful life (years) 5 5 10
Consider the three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions (repeatability / co terminated) you make in your analysis. Which alternative should be chosen? A B C Capital investment $2,000 $8,000 $20,000 Annual revenues less 600 2,200 3,600 expenses Useful life (years) 5 5 10
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Consider the three small mutually exclusive investment alternatives in the table
below. The feasible alternative chosen must provide service for a 10-year period.
The MARR is 12% per year, and the market value of each is 0 at the end of useful
life. State all assumptions (repeatability / co terminated) you make in your
analysis. Which alternative should be chosen?
A
B
C
Capital investment
$2,000
$8,000
$20,000
Annual revenues less
600
2,200
3,600
expenses
Useful life (years)
5
5
10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F114aa27f-3507-4143-a14d-dc6e891a12ff%2F3b292bd2-2ef8-47cd-b119-121ff8edfe52%2Fkh3qloa_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the three small mutually exclusive investment alternatives in the table
below. The feasible alternative chosen must provide service for a 10-year period.
The MARR is 12% per year, and the market value of each is 0 at the end of useful
life. State all assumptions (repeatability / co terminated) you make in your
analysis. Which alternative should be chosen?
A
B
C
Capital investment
$2,000
$8,000
$20,000
Annual revenues less
600
2,200
3,600
expenses
Useful life (years)
5
5
10
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