Use INCREMENTAL ANALYSIS AND PW(6%) to select the best alternative using MARR =

Question

Use INCREMENTAL ANALYSIS AND PW(6%) to select the best alternative using MARR = 6%

2. Evaluate the following BTCF mutually exclusive investment alternatives. Prepare tables, ATCF using PW(6%)

MARR =6% per year
TAX = 40%

For alternative A use STRAIGHR LINE (SL method)

For alternative B use MACRS- ADS 6 years recovery period.

1. SELECT BETWEEN ALTERNATIVES (60%) I. Select the best alternative using MARR-6%, Use INCREMENTAL ANALYSIS and PW (6%). MAQ-A | MAQ-BI MAQ-C Capital Investment $15,000 $10,000 $20,000 Annual Revenues Annual Cost Market Value at end 1,300 1,000 1,600 of useful life 5,900 3,600 6,000 900 6001,000 Useful life (years) 5

Explanation / Answer

solution-
ans-(2) .

PREFREANCE TO B .

BECAUSE CAPITAL INVEMENTS MORE THAN A. ITS GENERATE TO MORE THAN A ANNUAL REVENUES. ALSO DIFFERECE TO ANNUAL COST AVERAGE EFFIECTIVE. AND INCREASING MARKET VALUE AT END OF USEFUL LIFE. AS COMPARE TO A USELIFE LIFE YEARS.

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