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problem: A firm is considering a new milling equipment from among three alternatives as shown below:

Item 

A

B

C

Initial Cost

220,000

125,000

75,000

Uniform Annual Benefits

79,000

43,000

28,000

Annual M&O Costs

38,000

13,000

8,000

Salvage Value

16,000

6,900

3,000

Useful Life

10 years

10 years

10 years

MARR

15%

15%

15%

Make a choice table from 0% to 100 percent. Using incremental rate of return analysis, which alternative, if any, should the firm choose?

 

 

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918261

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