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(30 points) Cameos sales representative has offered an up front price reduction. The proposals are now as follows: Use incremental rate of return analysis to
(30 points) Cameos sales representative has offered an up front price reduction. The proposals are now as follows: Use incremental rate of return analysis to decide which alternative should be recommended. MARR is 18%.
Apex Brawn Cameo Drake Up front costs (180,000)$ (200,000)$ (210,000)$ (260,000)$
Annual cost saving 72,000$ 84,000$ 90,000$ 102,000$
Residual (salvage) 54,000$ 60,000$ 65,000$ 70,000$
Life (years) 6 6 6 6
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