Three alternative android models are under consideration by Wicks Wish List, Inc. The useful lives and pertinent cash flow data are summarized below. Assume repeatability, a study period of 120 years, and a MARR = 15%.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Three alternative android models are under consideration by Wicks Wish List, Inc. The useful lives and
pertinent cash flow data are summarized below. Assume repeatability, a study period of 120 years, and a
MARR = 15%.
Investment Cost
Annual Profit
Market Value at End of Useful Life
Useful Life
IRR
UND
Which design do you recommend? Why?
Emily Elizabeth Madison
305,000
635,000 780,000
105,000
150,000
156,000
100,000
300,000
400,000
4 years
22.31%
6 years
18.04%
8 years
16.66%
Transcribed Image Text:Three alternative android models are under consideration by Wicks Wish List, Inc. The useful lives and pertinent cash flow data are summarized below. Assume repeatability, a study period of 120 years, and a MARR = 15%. Investment Cost Annual Profit Market Value at End of Useful Life Useful Life IRR UND Which design do you recommend? Why? Emily Elizabeth Madison 305,000 635,000 780,000 105,000 150,000 156,000 100,000 300,000 400,000 4 years 22.31% 6 years 18.04% 8 years 16.66%
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  1. Suppose the Annual Profit value for the Emily is uncertain. Determine the annual profit value necessary for the Emily to breakeven with the Madison (none of the Madison’s cash flows change).
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