Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each alternative has an expected

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Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each alternative has an expected life of 10 years and no salvage value. Polisher 1 requires an initial investment of \($20\),000 and provides annual benefits of \($4\),465. Polisher 2 requires an initial investment of \($10\),000 and provides annual benefits of

\($1\),770. Polisher 3 requires an initial investment of \($15\),000 and provides annual benefits of \($3\),580. MARR is 15 percent/year.

a. What is the present worth of each polisher?

b. Which polisher should be recommended?

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Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

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