Three mutually exclusive alternatives are being considered for the production equipment at a tissue paper factory. The estimated cash flows for each alternative are given here. Initial cost Annual cost Annual revenues Salvage value at end of useful life Useful life System A 13,000 6,800 11,000 2,000 System B 11,000 5,800 10,000 1,000 System C 15,000 7,500 12,200 2,000 5 years 4 years 6 years Which equipment alternative should be selected? The firm's MARR is 20% per year. (Use AW

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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1,
Three mutually exclusive altematives are being considered for the production equipment at a tissue
paper factory. The estimated cash flows for each alternative are given here.
Initial cost
Annual cost
Annual revenues
Salvage value at end
of useful life
Useful life
System A
13,000
6,800
11,000
2,000
System B
11,000
5,800
10,000
1,000
System C
15,000
7,500
12,200
2,000
5 years
4 years
6 years
Which equipment alternative should be selected? The firm's MARR is 20% per year. (Use AW
method)
Transcribed Image Text:Three mutually exclusive altematives are being considered for the production equipment at a tissue paper factory. The estimated cash flows for each alternative are given here. Initial cost Annual cost Annual revenues Salvage value at end of useful life Useful life System A 13,000 6,800 11,000 2,000 System B 11,000 5,800 10,000 1,000 System C 15,000 7,500 12,200 2,000 5 years 4 years 6 years Which equipment alternative should be selected? The firm's MARR is 20% per year. (Use AW method)
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