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Consider the two mutually exclusive alternatives related to an improvement project, and recommend which one should be implemented using the annual worth method. The MARR is 15%, and the study period is 10 years. Assume repeatability (i.e., that the project with the 5 year life cycle could be repeated at the same investment with the same revenue and salvage value). Machine A Machine B Capital investment $20,500 $30,000 Annual cash flow $5,700 $5,400 Market value $4,000 $2000 Useful life (years) 5 10

Consider the two mutually exclusive alternatives related to an improvement project, and recommend which one should be implemented using the annual worth method. The MARR is 15%, and the study period is 10 years. Assume repeatability (i.e., that the project with the 5 year life cycle could be repeated at the same investment with the same revenue and salvage value). Machine A Machine B Capital investment $20,500 $30,000 Annual cash flow $5,700 $5,400 Market value $4,000 $2000 Useful life (years) 5 10

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the two mutually exclusive alternatives related to an improvement project, and recommend which one should be implemented using the annual worth method. The MARR is 15%, and the study period is 10 years. Assume repeatability (i.e., that the project with the 5 year life cycle could be repeated at the same investment with the same revenue and salvage value). Machine A Machine B Capital investment $20,500 $30,000 Annual cash flow $5,700 $5,400 Market value $4,000 $2000 Useful life (years) 5 10
Transcribed Image Text:Consider the two mutually exclusive alternatives related to an improvement project, and recommend which one should be implemented using the annual worth method. The MARR is 15%, and the study period is 10 years. Assume repeatability (i.e., that the project with the 5 year life cycle could be repeated at the same investment with the same revenue and salvage value). Machine A Machine B Capital investment $20,500 $30,000 Annual cash flow $5,700 $5,400 Market value $4,000 $2000 Useful life (years) 5 10
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