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a. At the end of their useful lives alternatives A and C will be replaced with identical replacements (the repeatability assumption) so that a 20-year
a. At the end of their useful lives alternatives A and C will be replaced with identical replacements (the repeatability assumption) so that a 20-year service requirement (study period) is met. Which alternative should be chosen and why?
b. Now suppose that at their end of their useful lives, alternatives A and C will be replaces with replacement alternatives having an 8% internal rate of return. Which alternative should be chosen and why?
Consider these mutually exclusive alternatives. MARR 8% per year, so all the alternatives are acceptable. Alternative $425 $280 $550 Capital investment (thousands) $145.09 $45.57 $49.92 Uniform annual savings (thousands) Useful life (years) 10 20 10% 10% Computed IRR (over useful life) 10%Step by Step Solution
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