CCM is currently comparing 4 DDC machines (DDC1, DDC2, DDC3, and DDC4) and they plan...
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CCM is currently comparing 4 DDC machines (DDC1, DDC2, DDC3, and DDC4) and they plan to procure one of them. CCM's MARR is 15% and the expected useful life of the DCC machine is six years.
Use incremental cash flow analysis to determine the economically optimal option. Solve this problem in Excel (IRR), copy/paste a screenshot of your Excel model below and provide an explanation.
\begin{tabular}{|l|r|r|r|r|} \hline & \multicolumn{1}{|c|}{ DDC1 } & \multicolumn{1}{c|}{ DDC2 } & \multicolumn{1}{c|}{ DDC3 } & \multicolumn{1}{|c|}{ DDC4 } \\ \hline Purchase Price & $500,000 & $620,000 & $550,000 & $600,000 \\ \hline Annual Revenues & $100,000 & $155,000 & $110,000 & $120,000 \\ \hline Annual Expenses & $25,000 & $30,000 & $30,000 & $30,000 \\ \hline Residual Value & $60,000 & $125,000 & $90,000 & $100,000 \\ \hline Study Period & 6 Years & 6 Years & 6 Years & 6 Years \\ \hline \end{tabular}
