4. Alternative design and development methods are proposed for a new engineering artifact. The following...
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4. Alternative design and development methods are proposed for a new engineering artifact. The following comparative information is given: Alternative I $10,000 6 years $1,000 Alternative II $40,000 9 years $5,000 Cash flows Initial investment Lifetime Salvage value Annual disbursements: Labor Power Rent Maintenance Property taxes $12,000 $250 $1,000 $500 $400 $4,000 $300 $500 $200 $2,000 All other expenses are equal for the two alternatives, and the income from the operation is not affected by the choice of alternatives. If the MARR is 15%, which alternative is better? MARR = Minimum Acceptable (Attractive) Rate of Return
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