6-4. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for ABC

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6-4. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for ABC Investment cost $30,000 $60,000 $50,000 Estimated units 15,000 20,000 18,000 to be sold/year Unit selling price, $3.50 $4.40 $4.10 $/unit Variable costs, $1.00 $1.40 $1.15 $/unit Annual expenses $15,000 $30,000 $26,000 (fixed) Market value 0 $20,000 $15,000 Useful life 10 years 10 years 10 year each alternative are given on p. 305. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. State your assumptions. (6.4)

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Engineering Economy

ISBN: 9780134870069

17th Edition

Authors: William Sullivan, Elin Wicks, C Koelling

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