Solved: A firm is considering three mutually exclusive

Chapter , Problem 8-24

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A firm is considering three mutually exclusive alter-natives as part of a production improvement program.The alternatives are as follows:ABCInstalled cost $10,000 $15,000 $20,000Uniform annual benefit 1,625 1,625 1,890Useful life, in years 10 20 20For each alternative, the salvage value at the end ofuseful life is zero. At the end of 10 years, Alt.Acould be replaced by anotherAwith identical costand benefits.(a)Construct a choice table for interest rates from0% to 100%.(b)The MARR is 6%. If the analysis period is20 years, which alternative should be selected?

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