Three mutually exclusive project alternatives are being evaluated. The estimated cash. flows for each alternative are shown below. The MARR is 15% per year. A decision maker can select one of these alternatives or decide to select none of them. Make a recomendation using the annual worth analysis. Investment ($) Project life (years) Annual revenue ($) Annual cost ($) Salvage value ($) Project A 6,000 10 5,200 2,100 1,200 Project B 8,000 10 6,000 1,800 1,500 Project C 9,000 10 7,500 2,000 2,500
Three mutually exclusive project alternatives are being evaluated. The estimated cash. flows for each alternative are shown below. The MARR is 15% per year. A decision maker can select one of these alternatives or decide to select none of them. Make a recomendation using the annual worth analysis. Investment ($) Project life (years) Annual revenue ($) Annual cost ($) Salvage value ($) Project A 6,000 10 5,200 2,100 1,200 Project B 8,000 10 6,000 1,800 1,500 Project C 9,000 10 7,500 2,000 2,500
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 6E
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Transcribed Image Text:Three mutually exclusive project alternatives are being evaluated. The estimated cash
flows for each alternative are shown below. The MARR is 15% per year. A decision
maker can select one of these alternatives or decide to select none of them. Make a
recomendation using the annual worth analysis.
Investment ($)
Project life (years)
Annual revenue ($)
Annual cost ($)
Salvage value ($)
Project A
6,000
10
5,200
2,100
1,200
Project B
8,000
10
6,000
1,800
1,500
Project C
9,000
10
7,500
2,000
2,500
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