Question: Chips USA is considering the following projects to improve their production process. Chips have a short life, so a 3-year horizon is used in evaluation.

Chips USA is considering the following projects to improve their production process. Chips have a short life, so a 3-year horizon is used in evaluation. Which projects should be done if the budget is $70,000? What is the opportunity cost of capital?

First Cost Benefit Project $20.000 30,000 $11.000 14,000 6.000 2,400 13,000 7,000 10,000 5.000 4 25,000 15,000 40.000 21

First Cost Benefit Project $20.000 30,000 $11.000 14,000 6.000 2,400 13,000 7,000 10,000 5.000 4 25,000 15,000 40.000 21,000

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