Alt. A Alt. B Alt. C Initial Cost $7,500 $5,000 $2,000 EUAB $1,800 $1,400 $700 Salvage $500 $200 $100 Value Life 10 10 10

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
5%
10%
15%
20%
25%
30%
35%
($2,000)
($4,000)
Alternative A
Alternative B
Alternative C
a. Based on the graph above and table, construct a Choice Table for the Alternatives given including
the "Do Nothing" option. Find the exact interest rate for the first cross over point and estimate the
others. Use the graph to narrow the interest rate.
b. If the MARR for a company was 15%, which Alternative would they choose?
Transcribed Image Text:$12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 5% 10% 15% 20% 25% 30% 35% ($2,000) ($4,000) Alternative A Alternative B Alternative C a. Based on the graph above and table, construct a Choice Table for the Alternatives given including the "Do Nothing" option. Find the exact interest rate for the first cross over point and estimate the others. Use the graph to narrow the interest rate. b. If the MARR for a company was 15%, which Alternative would they choose?
Alt. A
Alt. B
Alt. C
Initial Cost $7,500
$5,000
$2,000
EUAB
$1,800
$1.400
$700
Salvage
$500
$200
$100
Value
Life
10
10
10
Transcribed Image Text:Alt. A Alt. B Alt. C Initial Cost $7,500 $5,000 $2,000 EUAB $1,800 $1.400 $700 Salvage $500 $200 $100 Value Life 10 10 10
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