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Option A with present worth $50,407 Option B with present worth $50,407 Option B with present worth $42,544 Option A with present worth $42,544

Option A with present worth $50,407 Option B with present worth $50,407 Option B with present worth $42,544 Option A with present worth $42,544

Essentials Of Investments
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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Option A with present worth $50,407 Option B with present worth $50,407 Option B with present worth $42,544 Option A with present worth $42,544
Transcribed Image Text:Option A with present worth $50,407 Option B with present worth $50,407 Option B with present worth $42,544 Option A with present worth $42,544
12. at return on investment 15%. Using present Worth, which option do you choose? Option A: Initial cash expenditure: Warehouse modification $115,000 Equipment $250,000 Annual revenues $215,000 Annual O&M costs $126,000 Product life 8 years Salvage value (equipment) $25,000 Option B: Initial cash expenditure: Warehouse modification $189,000 Equipment $315,000 Annual revenues $289,000 Annual O&M costs $168,000 Product life 8 years Salvage value (equipment) $35,000
Transcribed Image Text:12. at return on investment 15%. Using present Worth, which option do you choose? Option A: Initial cash expenditure: Warehouse modification $115,000 Equipment $250,000 Annual revenues $215,000 Annual O&M costs $126,000 Product life 8 years Salvage value (equipment) $25,000 Option B: Initial cash expenditure: Warehouse modification $189,000 Equipment $315,000 Annual revenues $289,000 Annual O&M costs $168,000 Product life 8 years Salvage value (equipment) $35,000
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