The cost data for two projects are given below. (a) Draw the cashflow diagram of Project 1. (b) Determine the better alternative using the annual cash flow analysis. Initial cost Net Annual Benefit 30,000 Salvage value Life in years MARR Project 1 Project 2 $200,000 $180,000 24,000 20,000 45,000 10 13 6%
The cost data for two projects are given below. (a) Draw the cashflow diagram of Project 1. (b) Determine the better alternative using the annual cash flow analysis. Initial cost Net Annual Benefit 30,000 Salvage value Life in years MARR Project 1 Project 2 $200,000 $180,000 24,000 20,000 45,000 10 13 6%
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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
Transcribed Image Text:The cost data for two projects are given below.
(a) Draw the cashflow diagram of Project 1.
(b) Determine the better alternative using the annual cash flow analysis.
Project 1 Project 2
$200,000 $180,000
24,000
Initial cost
Net Annual Benefit 30,000
Salvage value
Life in years
45,000
20,000
13
10
MARR
6%
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