The maximum attractive rate of return is (9%).Which alternative should be selected.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Q3: A firm is considering three mutually exclusive alternatives as part of a production
improvement program .The alternatives are:
Alternative
A
B
Installed cost
20000
23000
19000
Uniform annual benefit
3500
3540
2200
Useful life in year
Salvage value
12
2000
13
14
2000
2000
The maximum attractive rate of return is (9%).Which alternative should be selected.
Transcribed Image Text:Q3: A firm is considering three mutually exclusive alternatives as part of a production improvement program .The alternatives are: Alternative A B Installed cost 20000 23000 19000 Uniform annual benefit 3500 3540 2200 Useful life in year Salvage value 12 2000 13 14 2000 2000 The maximum attractive rate of return is (9%).Which alternative should be selected.
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