3. A company with MARR = 9% is considering the following three investments.

a. Using present worth analysis with a least common multiple planning horizon, which investment should the company make? Solve the problem using the factors. (ANS: $-9,958.60 vs. $8,025.94 vs. $-8,962.94).

b. Using annual worth analysis with a least common multiple planning horizon, which investment should the company make? Solve the problem using the factors. (ANS: $-1,090.93 vs. $-879.21 vs. $-981.86)

c. Repeat parts a-b using Excel.

d. Determine the best investment using the ROR analysis method using Excel. (ANS: i* = 8.65% &

9.59%)

e. Determine the minimum salvage value that investment C would require so the company earns a 9%

ROR on this investment? Note the value may be more or less that the original. (ANS: $ 105618.78)

Annual Investment First Cost AnSalvageLife Value (years) $10,000 $30,000 $60,000 Name $30,000 80,000 100,000 Cost $2,000 $1,000 $6,200 $4,000 $12,000 $15,000 20 10 20