Given the financial data for four mutually exclusive
alternatives in the table below,
A
B
C
D
First cost
$18,000
$40,000
$21,200
45,000
O &M Cost/ year
2,600
5,000
3,900
11,000
Benefit/year
7,500
16,000
11,500
25,000
Salvage value
2,000
6,000
6,000
12,000
Life in years
4
Use a Rate of Return Analysis to solve for the following:
Which alternative should be chosen using an MARR of 9%?
Mathematical solution
Create a choice table from 0 – 25%.
Create a...