4-1 You are considering three mutually exclusive design alternatives. Do nothing is also an option....
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4-1 You are considering three mutually exclusive design alternatives. Do nothing is also an option. MARR is 15%. Cate First cost, S Annual Expense, S/ Annual revenue, S,/ Salvage value, S Useful life ROR 26,000 12,500 20,000 5,000 10 26.60% 52,000 12,000 25,000 9,000 10 22.13% 40,000 21,000 29,000 8,000 16.30% a. What is the present worth of each alternative? Which would you choose? b. Perform an incremental analysis using present worth. Which would you choose? c. Perform an incremental analysis using rate of return. Which would you choose? [Calculate ROR to two decimal places (eg, 6.78%) by manual interpolation. Show your factor notation and work.]
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