Three alternative android models are under consideration by Wicks Wish List, Inc. The useful lives andpertinent cash flow data are summarized below. Assume repeatability, a study period of 120 years, and aMARR = 15%.Investment CostAnnual ProfitMarket Value at End of Useful LifeUseful LifeIRRUNDWhich design do you recommend? Why?Emily Elizabeth Madison305,000635,000 780,000105,000150,000156,000100,000300,000400,0004 years22.31%6 years18.04%8 years16.66%

Emily Elizabeth Madison Investment Cost 305000 635000 780000 Annual Profit 105000 150000…

Answered: Three alternative android models are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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%

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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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