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A company must purchase one reactor to be used in an overall operation. Four reactors have been designed, all of which are equally capable of
A company must purchase one reactor to be used in an overall operation. Four reactors have been designed, all of which are equally capable of giving the required service. The following data apply to the four designs: Fixed-capital investment Sum of after-tax operating and fixed costs per year (all other costs are constant) 10,000 $12,000 $14,000 $16,000 3,000 2,800 2,350 2,100 If the company demands a 15 percent return after taxes on any unnecessary investment, which of the four designs should be accepted
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