Select the best alternative through internal rate of return analysis. Assume that the minimum attractive rate of return is 10% per year. Machine X |Machine Y Initial cost $ 400,000.00 $ 500,000.00 Annual operating cost $ 15,000.00 |$ 25,000.00 Annual profit $ 20,000.00 |$ 40,000.00 Residual value $ 85,000.00 |$ 100,000.00 Project life 15 years | none Engineering Economic Analysis
Select the best alternative through internal rate of return analysis. Assume that the minimum attractive rate of return is 10% per year. Machine X |Machine Y Initial cost $ 400,000.00 $ 500,000.00 Annual operating cost $ 15,000.00 |$ 25,000.00 Annual profit $ 20,000.00 |$ 40,000.00 Residual value $ 85,000.00 |$ 100,000.00 Project life 15 years | none Engineering Economic Analysis
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1.1CE
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Question
Select the best alternative through
Machine X |Machine Y
Initial cost $ 400,000.00 $ 500,000.00
Annual operating cost $ 15,000.00 |$ 25,000.00 Annual profit $ 20,000.00 |$ 40,000.00
Residual value $ 85,000.00 |$ 100,000.00
Project life 15 years | none
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