Given the financial data for four mutually exclusivealternatives in the table below,
| A | B | C | D |
First cost | $18,000 | $40,000 | $21,200 | 45,000 |
O &M Cost/ year | 2,600 | 5,000 | 3,900 | 11,000 |
Benefit/year | 7,500 | 16,000 | 11,500 | 25,000 |
Salvage value | 2,000 | 6,000 | 6,000 | 12,000 |
Life in years | 4 |
Use a Rate of Return Analysis to solve for the following:
- Which alternative should be chosen using an MARR of 9%?Mathematical solution
- Create a choice table from 0 – 25%.
- Create a graphical solution to the problem indicating whichalternative should be chosen for interest rates from 0 – 20%. Makesure your graph has all proper labels including the appropriatechoices for the Rate of Returns shown in the graph. The graphshould be on its own page and notembedded.
