E & A Construction must replace a piece of heavy earth moving equipment. Information concerning the three best alternatives is summarized below. If E and A has a minimum attractive rate of return (MARR) of 11%, which alternative should be chosen? Use IRR incremental analysis. Cat Volvo Liebherr $52,000 $63,000 $105,000 $15,000 $38,000 $31,000 | $37,000 $13,000 $19,000 | $22,000 First Cost Annual Operating & Maintenance Cost $9,000 $12,000 Annual Benefits Salvage Value Useful life 4 12
E & A Construction must replace a piece of heavy earth moving equipment. Information concerning the three best alternatives is summarized below. If E and A has a minimum attractive rate of return (MARR) of 11%, which alternative should be chosen? Use IRR incremental analysis. Cat Volvo Liebherr $52,000 $63,000 $105,000 $15,000 $38,000 $31,000 | $37,000 $13,000 $19,000 | $22,000 First Cost Annual Operating & Maintenance Cost $9,000 $12,000 Annual Benefits Salvage Value Useful life 4 12
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![E & A Construction must replace a piece of heavy earth moving equipment. Information
concerning the three best alternatives is summarized below. If E and A has a minimum attractive
rate of return (MARR) of 11%, which alternative should be chosen? Use IRR incremental analysis.
Cat
Volvo
Liebherr
$63,000 $105,000
$9,000
$12,000
$31,000
$37,000
$19,000
$22,000
First Cost
$52,000
$15,000
$38,000
$13,000
Annual Operating & Maintenance Cost
Annual Benefits
Salvage Value
Useful life
4
6.
12](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F34a3b64b-646d-44ce-a389-027e0e2ed394%2Fbf4af683-dc28-4fb6-a825-831931bfbfbb%2Fbqivfhm_processed.png&w=3840&q=75)
Transcribed Image Text:E & A Construction must replace a piece of heavy earth moving equipment. Information
concerning the three best alternatives is summarized below. If E and A has a minimum attractive
rate of return (MARR) of 11%, which alternative should be chosen? Use IRR incremental analysis.
Cat
Volvo
Liebherr
$63,000 $105,000
$9,000
$12,000
$31,000
$37,000
$19,000
$22,000
First Cost
$52,000
$15,000
$38,000
$13,000
Annual Operating & Maintenance Cost
Annual Benefits
Salvage Value
Useful life
4
6.
12
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