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1) Three mutually exclusive alternatives in the table below are under consideration for the design of a new facility. Assume that the interest rate (MARR)
1) Three mutually exclusive alternatives in the table below are under consideration for the design of a new facility. Assume that the interest rate (MARR) is (please see the table for your value). First draw the cash flow diagrams. Then, use the following methods to choose the best of these three feasible alternatives: Investment cost ($) Annual receipts (S/yr) Annual expenses (S/yr) Salvage value ($) Useful life (years) (please see the table for your value) Design I 25,000 9,000 4,500 6,000 10 Design II 14,000 6,000 3,700 2,500 8. a) The AW method b) The FW method (use co-termination assumption) c) The IRR method (find and compare individual IRR values) Design III 22,500 8,000 3,200 4,000 7 OC
marr is 20
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