(LG 5.3) Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a $100 000 first cost. A similar one with many extra features, B has a $400 000 first cost. A will save $50 000 per year over the cutter currently in use. B will save $150 000 per year. Each clicker cutter will last five years. If the MARR is 10 percent, which alternative is better? Use an IRR comparison.

(LG 5.3) Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a $100 000 first cost. A similar one with many extra features, B has a $400 000 first cost. A will save $50 000 per year over the cutter currently in use. B will save $150 000 per year. Each clicker cutter will last five years. If the MARR is 10 percent, which alternative is better? Use an IRR comparison.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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