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2) A technology company is planning to purchase one of two chips. Due to the pace of technological change in this area, it is realistic
2) A technology company is planning to purchase one of two chips. Due to the pace of technological change in this area, it is realistic to assume that these are one-shot investments. The expected cash flows for each machine are shown below. MARR is 2% per year. Which alternative is preferred (use FW analysis) Alternative 1 Alternative 2 Initial SRX SRY investment Expected life Z years W years Salvage Value SR 35,000 Annual Income SR 60,000 SR 85,000 Annual SR 30,000 SR 15,000 Expense 0 X=120,000 Y=320,000 Z=7 W=10 P=8
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