You have identified three alternatives for a small project at your plant. The interest rate is 4.8808848 % per semiannual. Alternative F Initial Cost, $ 180,000 Salvage Value, $ 80,000 Annual Cost, $ 16,000 Annual Revenue,$ 86,000 Life, years 4 G H 100,000 120,000 12,000 18,000 12,000 10,000 70,000 60,000 3 a) (15 pts) What is the LCM of the life of three alternatives if alternative H has a project life of 11 year? Which alternative should be selected? b) Which alternative should be selected if alternative H has an infinite life?

You have identified three alternatives for a small project at your plant. The interest rate is 4.8808848 % per semiannual. Alternative F Initial Cost, $ 180,000 Salvage Value, $ 80,000 Annual Cost, $ 16,000 Annual Revenue,$ 86,000 Life, years 4 G H 100,000 120,000 12,000 18,000 12,000 10,000 70,000 60,000 3 a) (15 pts) What is the LCM of the life of three alternatives if alternative H has a project life of 11 year? Which alternative should be selected? b) Which alternative should be selected if alternative H has an infinite life?

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

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2.2CE

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