6-49. A dyeing and finishing plant is interested in acquiring a dyeing machine for the production of a new product. Three alternatives are being considered as summarized below.

A B C Investment cost $20,000 $33,000 $45,000 Annual cash flows $10,000 $9,500 $10,500 Salvage value $4,000 $10,000 $18,000 Life in years 3 4 6 Which alternative should be recommended if the plant’s MARR (hurdle rate) is 15% per year using

(a) the IRR method and

(b) the annual worth method? (6.5)