14. 10.36 Your project manager asks you to evaluate alternatives A and B on the basis of their PW values using a real MARR of 10% per year and an inflation rate of 3% per year

(a) without any adjustment for inflation, and

(b) with inflation considered. Also, write the spreadsheet functions that will display the correct PW values.

(c) (Spreadsheet exercise) Your manager clearly wants alternative A to be selected. If inflation is steady at 3% per year, what real return, i, would A have to generate each year to make the choice between A and B indifferent? Maintain the real MARR of 10% for alternative B.Page 325 Table Summary: A table divided into 3 columns shows evaluation of two machines on basis of PW values and a fixed inflation rate. The column headers are marked as: Machine; A; and B. Machine A B First cost, $ −31,000 −48,000 AOC, $ per year −28,000 −19,000 Salvage, $ 5,000 7,000 Life, years 5 5 d $2.5 million to finance start-up costs for a site reclamation project. How much must the company receive each year in revenue to earn a real ROR of 20% per year for the 5-year project period, if inflation is 5% per year?