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2 years, 3 years, 4 years, 5 years, 10 years. Two alternatives, Alpha and Beta, have the net cash flow (NCF) and salvage value (SV)
2 years, 3 years, 4 years, 5 years, 10 years.
Two alternatives, Alpha and Beta, have the net cash flow (NCF) and salvage value (SV) profiles shown in the table below for their first cycles. Both alternatives can be repeated; however, the cash flow profiles and salvage value will change. Renewal of Alpha will cost 50 percent more for the initial investment (i.e., first cost will be $150,000 for the second cycle). Salvage values are adjusted based on the new first cost within each cycle. Further renewals of Alpha will cause the initial investment to increase 50 percent over the previous cycle. Annual revenues for Alpha are expected to continue increasing $10,000 per year indefinitely. Renewals of Beta will cost 60 percent more for the initial investment for each renewal. Salvage values for each cycle are adjusted based on each cycle's initial cost. Annual revenues for Beta are expected to continue increasing at $10,000 per year indefinitely. Specify the complete set of cash flows for each of the following planning horizonsStep by Step Solution
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