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Describe Evaluate the purchase option

A firm is considering a new milling machine from among three (3) 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%

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

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9163563

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