Question
5. (20 points) Solve this problem in Excel. The following two alternatives are mutually exclusive. (a) Which one will you select if your MARR is
5. (20 points) Solve this problem in Excel. The following two alternatives are mutually exclusive.
(a) Which one will you select if your MARR is 15% per year? Use rate of return analysis.
(b) Graph interest rate vs. present value for both option 1 and 2.
( c) Discuss how your selection between option 1 and 2 will change when MARR is changed and at which interest rate the two options are the same economically.
| Alternative | Initial Cost | Annual Benefit | Life, years |
| Ordinary (O) | $38,000 | $9,400 | 5 |
| Above average (AA) | $35,000 | $9,000 | 6 |
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Public Sector Accounting And Budgeting For Non-Specialists
Authors: G. Jan Van Helden, Ron Hodges
1st Edition
1137376988, 9781137376985
