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A Company is considering three types of tower cranes for the construction of the new mall. The cash flows for the three types are shown

A Company is considering three types of tower cranes for the construction of the new mall. The cash flows for the three types are shown below:

Model

A

B

C

Purchase Cost

$10,000

$20,000

$30,000

Annual Operation Cost

$1,000

$800

$1,200

Annual Revenue

$2,800

$3,500

$4,500

Salvage Value

0

5000

0

Useful Life

10 Years

20 Years

30 Years

The alternatives could be replaced with another with identical cost and benefits. The MARR is 10%.

a- Which type of crane, should be selected?

b- If the useful life of crane A and Crane B is 30 years, and the two projects will maintain their annual revenue and annual operation cost the same for the whole period and the salvage value for Crane B will be 0 by the end of 30 years, which type of crane, should be selected

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