Final Finishing is considering 3 mutually exclusive alternatives for a new polisher. Each alternative has an expected life of 8 years and no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,370. Polisher 2 requires an initial investment of $12,200 and provides annual benefits of $1.830. Polisher 3 requires an initial investment of $18,600 and provides annual benefits of $3,770. MARR is 12% / year.
Final Finishing is considering 3 mutually exclusive alternatives for a new polisher. Each alternative has an expected life of 8 years and no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,370. Polisher 2 requires an initial investment of $12,200 and provides annual benefits of $1.830. Polisher 3 requires an initial investment of $18,600 and provides annual benefits of $3,770. MARR is 12% / year.
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
Ef 367.future worth of polisher 1 and of polisher 2?
Transcribed Image Text:Final Finishing is considering 3 mutually exclusive alternatives for a new polisher. Each alternative has an expected life of 8 years and
no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,370. Polisher 2 requires an
initial investment of $12,200 and provides annual benefits of $1.830. Polisher 3 requires an initial investment of $18,600 and provides
annual benefits of $3,770. MARR is 12%/year.
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