7-65 Two mutually exclusive alternatives are being considered. Both have lives of ten years. Alternative A has a first cost of $10,000 and an annual benefit of $4500. Alternative B costs $15,000 and has annual benefits of $8800. If the MARR is 6%, which alternative should be selected? Solve the problem by: (a) Present worth analysis (b) Annual cash flow analysis (c) Rate of return analysis

7-65 Two mutually exclusive alternatives are being considered. Both have lives of ten years. Alternative A has a first cost of $10,000 and an annual benefit of $4500. Alternative B costs $15,000 and has annual benefits of $8800. If the MARR is 6%, which alternative should be selected? Solve the problem by: (a) Present worth analysis (b) Annual cash flow analysis (c) Rate of return analysis

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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