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PROBLEM 1: Three mutually exclusive project design alternatives are being considered. The estimated sales and cost data for each alternative are the following: Project Design Alternatives A B с Investment/Initial Cost ($) 50,000 60,000 40,000 Production Capacity (quantity of units) 12,000 16,000 12,000 Selling Price ($ per unit) Variable Cost ($ per unit) Annual Expenses-Fixed Cost ($) 9,000 11,000 Residual Value ($) 10,000 0 Useful Life (years) 10 10 If MARR -20%, which of the alternatives should you recommend? 3.50 1.40 3.50 1.10 5,000 12,000 10 3.50 1.50

PROBLEM 1: Three mutually exclusive project design alternatives are being considered. The estimated sales and cost data for each alternative are the following: Project Design Alternatives A B с Investment/Initial Cost ($) 50,000 60,000 40,000 Production Capacity (quantity of units) 12,000 16,000 12,000 Selling Price ($ per unit) Variable Cost ($ per unit) Annual Expenses-Fixed Cost ($) 9,000 11,000 Residual Value ($) 10,000 0 Useful Life (years) 10 10 If MARR -20%, which of the alternatives should you recommend? 3.50 1.40 3.50 1.10 5,000 12,000 10 3.50 1.50

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
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PROBLEM 1: Three mutually exclusive project design alternatives are being considered. The estimated sales and cost data for each alternative are the following: Project Design Alternatives A B с Investment/Initial Cost ($) 50,000 60,000 40,000 Production Capacity (quantity of units) 12,000 16,000 12,000 Selling Price ($ per unit) Variable Cost ($ per unit) Annual Expenses - Fixed Cost ($) 9,000 11,000 Residual Value ($) 10,000 0 Useful Life (years) 10 10 If MARR=20%, which of the alternatives should you recommend? 3.50 1.40 3.50 1.10 5,000 12,000 10 3.50 1.50
Transcribed Image Text:PROBLEM 1: Three mutually exclusive project design alternatives are being considered. The estimated sales and cost data for each alternative are the following: Project Design Alternatives A B с Investment/Initial Cost ($) 50,000 60,000 40,000 Production Capacity (quantity of units) 12,000 16,000 12,000 Selling Price ($ per unit) Variable Cost ($ per unit) Annual Expenses - Fixed Cost ($) 9,000 11,000 Residual Value ($) 10,000 0 Useful Life (years) 10 10 If MARR=20%, which of the alternatives should you recommend? 3.50 1.40 3.50 1.10 5,000 12,000 10 3.50 1.50
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