A thermoplastic film manufacturer is trying to decide between 8 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. в D E F Initial Costs $13,000 $12,00o $11,000 $12,500 $16,000 $26,000 $19,500 Annual expenses $6,550 $9,125 $7,000 $8,000 $7,000 $11,000 $12,000 $13,000 Annual revenue $9,000 $10,00o $9,500 $13,500 $16,000 $16,200 Lifetime(years) 9. 9. 9. 9. IRR 11.54% 6.88% 9.17% 11.81% 5.24% 4.86% 6.48% Perform an IRR-incremental analysis to find the best alternative.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 1PA: Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the...
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A thermoplastic film manufacturer is trying to decide between 8 types of thermoforming
molding
processes to be added to its molding operation. The estimated costs and revenues are shown
below. Compare them on the basis of the IRR method and determine which process should be
selected if the company's MARR is 7% per year.
B C
D
E
F
G
Initial Costs
$13,000 $12,00o $11,000 $12,500 $16,000 $26,000 $19,500
Annual expenses $6,550
$9,125
$7,000 $8,000 $7,000 $11,000 $12,000 $13,000
Annual revenue
$9,000 $10,000 $9,500 $13,500 $16,000 $16,200
Lifetime(years)
9.
9
9.
9.
IRR
11.54%
6.88%
9.17%
11.81% 5.24% 4.86% 6.48%
Perform an IRR-incremental analysis to find the best alternative.
Transcribed Image Text:A thermoplastic film manufacturer is trying to decide between 8 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. B C D E F G Initial Costs $13,000 $12,00o $11,000 $12,500 $16,000 $26,000 $19,500 Annual expenses $6,550 $9,125 $7,000 $8,000 $7,000 $11,000 $12,000 $13,000 Annual revenue $9,000 $10,000 $9,500 $13,500 $16,000 $16,200 Lifetime(years) 9. 9 9. 9. IRR 11.54% 6.88% 9.17% 11.81% 5.24% 4.86% 6.48% Perform an IRR-incremental analysis to find the best alternative.
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