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26. In the Rawhide Company (a leather products distributor), decisions regarding approval of proposals for capital investment are based upon a stipulated MARR of 18%
26. In the Rawhide Company (a leather products distributor), decisions regarding approval of proposals for capital investment are based upon a stipulated MARR of 18% per year. The five packaging devices listed in Table P-26 were compared, assuming a 10-year life and zero market value for each at that time. Which one (if any) should be selected? Make any additional calculations that you think are needed to make a comparison, using the ERR method. Let e = 18%. (4) TABLE P-26 Table for Problem 26 Packaging Equipment Capital investment Annual revenues less expenses External rate of return (ERR) $38,000 11,000 21.1% B $50,000 14,100 20.8% C $55,000 16,300 21.4% D $60,000 16,800 20.7% E $70,000 19,200 20.5%
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