Each of the following 10 independent projects has a 10 years life and no salvage value .

Question:

Each of the following 10 independent projects has a 10 years life and no salvage value.

The projects have been proposed by the staff of the Ace Card Company. The MARR of Ace has been 12% for several years.

(a) If there is ample money available, what projects should Ace approve?

(b) Rank orders all the acceptable projects in their order of desirability.

Uniform Computed Rate of Annual Cost Benefits Project (thousands) (thousands) Return $1.03 3.22 16% 15 17 10 1.77 12 30

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...