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The value of MARR to be chosen for selecting plan B and the reason for doing so.
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Answer to Problem 36P
The value of MARR is
Use this MARR as at
Hence in order to select project
Explanation of Solution
Calculations:
Calculate the difference between cash flows
Year | Cash flow |
Cash flows |
Incremental analysis |
0 | |||
Table (1)
Write the expression to calculate the present worth.
Here, the initial cost is
Substitute
On solving for value of
Use this MARR as at
Hence in order to select project
Conclusion:
Thus, the value of MARR is
Use this MARR as at
Hence in order to select project
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Chapter 16 Solutions
ENGR.ECONOMIC ANALYSIS
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