Three mutually exclusive designs for a bypass are under consideration. The bypass has a 10-year life. The first design incurs a cost of $1.24 million for a net savings of $310,000 per annum. The second design would cost $1.5 million for a net savings of $400,000 per annum. The third has a cost of $2.14 million for a net savings of $510,000 per annum. For each of the alternatives, what range of values for the MARR results in its being chosen? It is not necessary that any be chosen. Select the correct choice below and, if necessary, fill in the answer boxes to complete your choice. (Type integers or decimals rounded to one decimal place as needed.) O A. Design 2 is chosen for 0% s MARRS Design 3 is chosen for % < MARR s When MARR > %, the do-nothing alternative is chosen. O B. Design 2 is chosen for 0% S MARR S %. When MARR > %, the do-nothing alternative is chosen. OC. Design 3 is chosen for 0% s MARRS Design 2 is chosen for % < MARRS %. When MARR > %, the do-nothing alternative chosen. O D. Design 1 is chosen for 0% s MARR S %. Design 2 is chosen for % < MARRS %. When MARR > %, the do-nothing alternative chosen. O E. Design 3 is chosen for 0% s MARRS % When MARR > %, the do-nothing alternative is chosen. The do-nothing alternative is always chosen
Three mutually exclusive designs for a bypass are under consideration. The bypass has a 10-year life. The first design incurs a cost of $1.24 million for a net savings of $310,000 per annum. The second design would cost $1.5 million for a net savings of $400,000 per annum. The third has a cost of $2.14 million for a net savings of $510,000 per annum. For each of the alternatives, what range of values for the MARR results in its being chosen? It is not necessary that any be chosen. Select the correct choice below and, if necessary, fill in the answer boxes to complete your choice. (Type integers or decimals rounded to one decimal place as needed.) O A. Design 2 is chosen for 0% s MARRS Design 3 is chosen for % < MARR s When MARR > %, the do-nothing alternative is chosen. O B. Design 2 is chosen for 0% S MARR S %. When MARR > %, the do-nothing alternative is chosen. OC. Design 3 is chosen for 0% s MARRS Design 2 is chosen for % < MARRS %. When MARR > %, the do-nothing alternative chosen. O D. Design 1 is chosen for 0% s MARR S %. Design 2 is chosen for % < MARRS %. When MARR > %, the do-nothing alternative chosen. O E. Design 3 is chosen for 0% s MARRS % When MARR > %, the do-nothing alternative is chosen. The do-nothing alternative is always chosen
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Three mutually exclusive designs for a bypass are under consideration. The bypass has a 10-year life. The first design incurs a cost of S1.24 million for a net savings of $310,000 per annum. The second design would cost $1.5 million for a net savings of
$400,000 per annum. The third has a cost of $2.14 million for a net savings of $510,000 per annum. For each of the alternatives, what range of values for the MARR results in its being chosen? It is not necessary that any be chosen.
Select the correct choice below and, if necessary, fill in the answer boxes to complete your choice.
(Type integers or decimals rounded to one decimal place as needed.)
O A. Design 2 is chosen for 0% s MARR S %
Design 3 is chosen for % < MARR S %.
When MARR > %, the do-nothing alternative
chosen
O B. Design 2 is chosen for 0% S MARRS
%
When MARR > %, the do-nothing alternativer
chosen.
O C. Design 3 is chosen for 0% s MARR S %
Design 2 is chosen for % < MARRS %.
When MARR > %, the do-nothing alternative
chosen
O D. Design 1 is chosen for 0% s MARR S %
Design 2 is chosen for % < MARRS %.
When MARR>
%, the do-nothing alternative
chosen
O E. Design 3 is chosen for 0% s MARR S %.
When MARR > %, the do-nothing alternative
chosen.
OF. The do-nothing alternative is always chosen.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education