FMF plans to purchase a new breed of milling machines for its operations. As it's procurement manager, Pauline, is to consider the following four options. Each of these have a useful life of 12 years with no scrap value. The company has an MARR of 14.6% Milling Machine 2 3 First Cost $98727 $157385 $203574 Annual $21195 $35971 $46010 Savings a) What is IRR for Milling Machine #1? b) What is the Incremental IRR for Milling Machine #2? c) What is the Incremental IRR for Milling Machine #3? d) Which Milling machine would be the best option?
FMF plans to purchase a new breed of milling machines for its operations. As it's procurement manager, Pauline, is to consider the following four options. Each of these have a useful life of 12 years with no scrap value. The company has an MARR of 14.6% Milling Machine 2 3 First Cost $98727 $157385 $203574 Annual $21195 $35971 $46010 Savings a) What is IRR for Milling Machine #1? b) What is the Incremental IRR for Milling Machine #2? c) What is the Incremental IRR for Milling Machine #3? d) Which Milling machine would be the best option?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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