Question
A chemical company is considering buying a new production equipment. The following models are identified as viable candidates from the technical perspectives. The company's MARR
A chemical company is considering buying a new production equipment. The following models are identified as viable candidates from the technical perspectives. The company's MARR is 20%. When the cotermination assumption is made, what is the difference between the FW of the best and worst alternatives? (Please keep your answer in thousands of dollars and keep one decimal place)
| Machine A | Machine B | Machine C | |
| Capital investment | $30,000 | $26,000 | $16,000 |
| Useful life (years) | 8 | 12 | 6 |
| Market value at end of life | $0 | $5,500 | $0 |
| Annual revenues | $180,000 | $152,000 | $80,000 |
| Annual expenses | $171,000 | $140,000 | $68,000 |
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Principles Of Corporate Finance
Authors: Richard Brealey
10th Global Edition
0071314172, 9780071314176
