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In: Economics

Problem 5.73 Given the following data, use present worth analysis to find the best alternative, A,...

Problem 5.73

Given the following data, use present worth analysis to find the best alternative, A, B, or C.

Use an analysis period of 12 years and 15% interest.

Please show complete solution procedure, and include cash flow diagram(s) for each machine.

Machine                         A                         B                         C

Initial cost                      $10,000               $15,000               $12,000

Annual benefit               $6,000                 $10,000               $5,000

Salvage value               $1,000                 $-2,000                $3,000

Useful life (yrs)              2 years                3 years                 4 years

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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