Two alternative means of providing engineering drafting services are under consideration.Handy-Cam$250,000$115/hr$250/hr$15,000R-tistry$200,000$120/hr$250/hr$20,000Purchase PriceOperating CostRevenueMarket value (end of useful life)Useful life6 years6 yearsIt is anticipated that the chosen alternative will be used to generate revenue 8 hrs/day, 250days per year. The company uses a MARR = 12% for all investments.12% Interest TableFor the anticipated annual use of the drafting services, which alternative would yourecommend? Remember to show your calculations in your supporting work.O Handy-CamO R-tistryAt what usage of the drafting services (hours/year) would you be indifferent between thetwo alternatives? Remember to show your calculations in your supporting work.Round your answer to the neares whole hour.Ouection 7O ntc

Working Particulars Handy Cam R- tistry Cost 250000 200000 Less scrap at the end of 6 years…

Answered: wo alternati

Business

Finance

wo alternati

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 2P

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