4. A town in northern Colorado is planning on investing in a water purification system....
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4. A town in northern Colorado is planning on investing in a water purification system. Three mutually exclusive systems have been proposed, and their capital investment costs and net annual benefits are the following values (Salvage values are provided in the table). If the town's MARR is 15% per year use the Incremental Benefit Cost ratio method to determine which system is the best. Draw cash flow diagrams for each alternative before calculating Incremental Benefit Cost ratio. (20 Points) System EOY A B 0 -$105,000 -$255,000 -$110,000 1 70,000 100,000 60,000 2 55,000 130,000 60,000 3 42,000 90,000 60,000 4 35,000 70,000 60,000 Salvage Value $10,000 $40,000 $30,000
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