Please DO NOT use excel. Show all steps please. You have 2 mutually exclusive alternatives and a MARR of 9%. Which alternative is preferred, based on repeatability assumption? Alternative E F Cap...
Please DO NOT use excel. Show all steps please.
You have 2 mutually exclusive alternatives and a MARR of 9%. Which alternative is preferred, based on repeatability assumption?
| Alternative | E | F |
| Capital Investment | $14,000 | $65,000 |
| Annual Expenses | $14,000 | $9,000 |
| Useful Life (years) | 4 | 20 |
| Market Value at end of useful life | $8,000 | $13,000 |
Homework Answers
MARR = 9%
EUAC of E = 14000*(A/P,9%,4) + 14000 - 8000*(A/F,9%,4)
= 14000*0.308669 + 14000 - 8000*0.218669
= 16572.01
EUAC of F = 65000*(A/P,9%,20) + 9000 - 13000*(A/F,9%,20)
= 65000*0.109546 + 9000 - 13000*0.019546
= 15866.42
As EUAC of F is lower, it should be selected
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