Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the end of the useful life, the investment will be sold A $28,000 Capital Investment Annual Expenses Annual Revenues MV at EOY 10 Useful life 15,000 23,000 6,000 10 years B $55,000 13,000 28,000 8,000 10 years C $40,000 a) PWA = $Blank 1: PWB = $Blank 2: PWC = $Blank 3 b) IRRA= Blank 4%; IRRB = Blank 5%; IRRC = Blank 6% 22,000 32,000 10,000 10 years Evaluate all alternatives using PW & IRR method and determine which alternative is preferable.
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the end of the useful life, the investment will be sold A $28,000 Capital Investment Annual Expenses Annual Revenues MV at EOY 10 Useful life 15,000 23,000 6,000 10 years B $55,000 13,000 28,000 8,000 10 years C $40,000 a) PWA = $Blank 1: PWB = $Blank 2: PWC = $Blank 3 b) IRRA= Blank 4%; IRRB = Blank 5%; IRRC = Blank 6% 22,000 32,000 10,000 10 years Evaluate all alternatives using PW & IRR method and determine which alternative is preferable.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return , round off to two decimal places (in percentage).
![Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The
MARR is 20% per year. At the end of the useful life, the investment will be sold
A
$28,000
Capital
Investment
Annual
Expenses
Annual
Revenues
MV at EOY 10
Useful life
Blank 1
Blank 2
Blank 3
Blank 4
15,000
Blank 5
23,000
Blank 6
6,000
10 years
a) PWA = $Blank 1: PWB = $Blank 2: PWC = $Blank 3
b) IRRA= Blank 4%; IRRg = Blank 5%; IRRC = Blank 6%
Add your answer
Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return, round off to two decimal places (in percentage).
Add your answer
Add your answer
B
$55,000
Add your answer
13,000
Add your answer
28,000
Evaluate all alternatives using PW & IRR method and determine which alternative is preferable.
Add your answer
8,000
10 years
C
$40,000
22,000
32,000
10,000
10 years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90d9b958-0bcc-49a1-a89f-df62fee032d1%2Fc6ab9de5-6ce6-4711-ad80-9e3f88ddc29f%2Fir8kwx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The
MARR is 20% per year. At the end of the useful life, the investment will be sold
A
$28,000
Capital
Investment
Annual
Expenses
Annual
Revenues
MV at EOY 10
Useful life
Blank 1
Blank 2
Blank 3
Blank 4
15,000
Blank 5
23,000
Blank 6
6,000
10 years
a) PWA = $Blank 1: PWB = $Blank 2: PWC = $Blank 3
b) IRRA= Blank 4%; IRRg = Blank 5%; IRRC = Blank 6%
Add your answer
Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return, round off to two decimal places (in percentage).
Add your answer
Add your answer
B
$55,000
Add your answer
13,000
Add your answer
28,000
Evaluate all alternatives using PW & IRR method and determine which alternative is preferable.
Add your answer
8,000
10 years
C
$40,000
22,000
32,000
10,000
10 years
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