Consider the below alternatives, using a MARR of 10%, and an investment budget of $100,000: 1....

Consider the below alternatives, using a MARR of 10%, and an investment budget of $100,000:

1. Calculate the Internal Rate of Return for each Option

2. Assuming the options A, B, C, and D are mutually exclusive, which option is the best economical choice? You can choose any appropriate method of analysis for comparing alternatives.

3. What is the weighted average Rate of Return for the choice you made assuming that what remains from of the budget is invested at the MARR.

Option	A	B	C	D
First Cost	-80,000	-48,000	-2,000	-30,000
Annual Operating Cost	-4,000	-8,000	-130,000	-75,000
Annual Revenues	34,000	26,000	131,200	80,000
Annual Payments
Salvage Value	20,000	2,500	0	10,000
Life (yrs)	3	4	4	6
IRR

Expert Solution

jeff jeffy answered 5 months ago

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