Select a system using (a) no-return payback, (b) discounted payback at 15%, and (c) AW analysis at 15%. Comment on results.

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
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Select a system using (a) no-return payback, (b) discounted payback at 15%, and
(c) AW analysis at 15%. Comment on results.
Al-based inspection
system
First cost, $1000
NCF, $1000 per year
Maximum life, years
System 1
12,000
+3,000
7
System 2
8,000
+1000 (years 1-5)
+3000 (years 6-14)
14
Transcribed Image Text:Select a system using (a) no-return payback, (b) discounted payback at 15%, and (c) AW analysis at 15%. Comment on results. Al-based inspection system First cost, $1000 NCF, $1000 per year Maximum life, years System 1 12,000 +3,000 7 System 2 8,000 +1000 (years 1-5) +3000 (years 6-14) 14
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