3.Sanders Corp. is considering threemutually exclusive alternatives forone of their production facilities.The cash flow details, which indicatethe expected revenues for eachpossible capital investment (option)are shown in thousands of dollars inthe table provided.Year012345$6GAGA$$$$LA CA$Option #1$(8.00) $GAGA2.60 $2.60 $2.60$2.60 $2.60 $2.60$Option #2Option #3Assuming a MARR rate of 12.0% peryear and based on a rate of returnanalysis which (if any) of thesealternatives should be implemented?What is the discounted payback period and annual worth of the preferred alternative (if any wasselected).(13.90) $4.05 $4.05 $4.05 $4.05 $4.05 $4.05 $(24.00)3.006.009.0012.0015.00

Year Option #1 Option #2 Option #3 0 -8 -13.9 -24 1 2.6 4.05 0 2 2.6 4.05 3 3 2.6 4.05 6 4…

3. Sanders Corp. is considering three mutually exclusive alternatives for one of their production facilities. The cash flow details, which indicate the expected revenues for each possible capital investment (option) are shown in thousands of dollars in the table provided. Year Option #1 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ Option #2 (8.00) $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ (13.90) $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ Option #3 (24.00) 3.00 6.00 9.00 12.00 15.00 Assuming a MARR rate of 12.0% per year and based on a rate of return analysis which (if any) of these alternatives should be implemented? What is the discounted payback period and annual worth of the preferred alternative (if any was selected).

3. Sanders Corp. is considering three mutually exclusive alternatives for one of their production facilities. The cash flow details, which indicate the expected revenues for each possible capital investment (option) are shown in thousands of dollars in the table provided. Year Option #1 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ Option #2 (8.00) $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ 2.60 $ (13.90) $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ 4.05 $ Option #3 (24.00) 3.00 6.00 9.00 12.00 15.00 Assuming a MARR rate of 12.0% per year and based on a rate of return analysis which (if any) of these alternatives should be implemented? What is the discounted payback period and annual worth of the preferred alternative (if any was selected).

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.4IP

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