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Year 0 Option #1 Option #2 Option #3 $ (8.00) $ (13.90) $ (24.00) 1 $ 2.60 $ 4.05 $ 2 $ 2.60 $ 4.05 $ 3.00 3 3 69 $ 2.60 $ 4.05 $ 6.00 4 $ 2.60 $ 4.05 $ 9.00 5 69 $ 2.60 $ 4.05 $ 12.00 19 6 $ 2.60 $ 4.05 $ 15.00

Year 0 Option #1 Option #2 Option #3 $ (8.00) $ (13.90) $ (24.00) 1 $ 2.60 $ 4.05 $ 2 $ 2.60 $ 4.05 $ 3.00 3 3 69 $ 2.60 $ 4.05 $ 6.00 4 $ 2.60 $ 4.05 $ 9.00 5 69 $ 2.60 $ 4.05 $ 12.00 19 6 $ 2.60 $ 4.05 $ 15.00

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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  1. Sanders Corp. is considering three mutually exclusive alternatives for one of their production facilities.

The cash flow details, which indicate the expected revenues for each possible capital investment (option) are shown in thousands of dollars in the table provided. 

Assuming a MARR rate of 11.0% per year and based on a rate of return analysis which (if any) of these alternatives should be implemented? 

What is the discounted payback period and annual worth of the preferred alternative (if any was selected).

 

Year 0 Option #1 Option #2 Option #3 $ (8.00) $ (13.90) $ (24.00) 1 $ 2.60 $ 4.05 $ 2 $ 2.60 $ 4.05 $ 3.00 3 3 69 $ 2.60 $ 4.05 $ 6.00 4 $ 2.60 $ 4.05 $ 9.00 5 69 $ 2.60 $ 4.05 $ 12.00 19 6 $ 2.60 $ 4.05 $ 15.00
Transcribed Image Text:Year 0 Option #1 Option #2 Option #3 $ (8.00) $ (13.90) $ (24.00) 1 $ 2.60 $ 4.05 $ 2 $ 2.60 $ 4.05 $ 3.00 3 3 69 $ 2.60 $ 4.05 $ 6.00 4 $ 2.60 $ 4.05 $ 9.00 5 69 $ 2.60 $ 4.05 $ 12.00 19 6 $ 2.60 $ 4.05 $ 15.00
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