Question

Three mutually exclusive earth moving pieces of equipment are being considered for several large building projects in India over the next five years. The estimated cash flows for each alternative are given below. The construction company's MARR is 18% per year. Which of the three alternatives, if any, should be adopted? Assume repeatability is appropriate for this comparison Caterpillar Deere Case Capital investment $22,000 $26,200 $17.500 Net annual revenue $7,500 $9,500 $5,000 Salvage value $4,500 $5,000 $3,500 Useful life 4 years 3 years 5 years Click the icon to view the interest and annuity table for discrete compounding when i = 18% per year The AW of the Caterpillar is (Round to the nearest dollar) The Aw of the Deere is $(Round to the nearest dollar) The AW of the Case is (Round to the nearest dollar.) Which of the alternatives, if any, should be adopted? Choose the correct answer below. v O A Deere OB Case OC Caterpillar OD. None of the above Click to select your answer(s).

Please show the answer clearly

Answer 1

For Equipment caterpillar Anual worth - - 22000 x (AlP, 18:, 4) + 7500 +4500 X CAF, 18.1., 2) --22000 x0.39717386 +7500+ 4500 X 0.1917386 - – 375 or Equipment Deere Annual corth - - 26200 x (AlP, 18), 3)+9500 + 5000 x (Alf, 18.1., 3) =-26200 X 0.4599238 +9500 + 5000 x 0.2799238 = -)150.38 - - 1150

for Equipment Case Annual = -17500 x (AlP, 18:).,5) + 5000 + 3500 X worth CALF, 18.1.,5) = -17500 x 0.319 777 +5000 + 3500 X0.139777 = -106.878 - – 107 All the above alternatives are Negative, so select of the above we should not Option. D. None of the above