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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 p% per year. Which alternative is preferred (use FW analysis) Alternative 1 Alternative 2 Initial SRX SRY investment Expected life 2 years W years Salvage Value SR 35,000 0 Annual Income SR 60,000 SR 85,000 Annual SR 30,000 SR 15,000 Expense Value of X Value of Value of Value of Value of Y Z W 100,000 300,000 5 7 5 120,000 320,000 7 10 8 150,000 350,000 5 8 10 170,000 370,000 6 12 200,000 400,000 5 15 220,000 420,000 4 6 18 250,000 450,000 6 10 20 aloc
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