Three mutually exclusive earth-moving pieces of equipment are being considered for several large building projects in India over the next five years. The estimated cash flows for each alternative are given below. The construction company's MARR is 12% per year. Which of the three alternatives, if any, should be adopted? Assume repeatability is appropriate for this comparison. Caterpillar Deere Case Capital investment Net annual revenue $22,000 $6,500 $26,400 $16,000 $10,000 $5,200 Salvage value $4,500 $4,500 $3,750 Useful life 4 years 3 years 5 years
Three mutually exclusive earth-moving pieces of equipment are being considered for several large building projects in India over the next five years. The estimated cash flows for each alternative are given below. The construction company's MARR is 12% per year. Which of the three alternatives, if any, should be adopted? Assume repeatability is appropriate for this comparison. Caterpillar Deere Case Capital investment Net annual revenue $22,000 $6,500 $26,400 $16,000 $10,000 $5,200 Salvage value $4,500 $4,500 $3,750 Useful life 4 years 3 years 5 years
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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