Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR =10%. A B D First cost $15,000 $21,200 $36,000 45,000 O &M Cost/ 1,600 700 400 1,000 year Benefit/year 8,000 9,000 13,000 15,000 Salvage value 3,000 4,600 6,000 10,000 Life in years 5

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A: See above.

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A:

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Q: B

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A: Given: Two alternatives A and B is: 0 = -53,000+ 21,000(P/A, ∆i*B-A,5) + 80000(P/F, ∆i*B-A,5)

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.