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As the General Manager of a Manufacturing Company you are considering to add a new line of products which you anticipate will capture a market

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As the General Manager of a Manufacturing Company you are considering to add a new line of products which you anticipate will capture a market share for the next 20 years. You consider two potential options: Option A Option B Investment 900,000 600,000 Annual Benefits 150,000 150,000 Annual O&M 35,000 40,000 100,000 90,000 Salvage Value Line useful Life (yr) Project life horizon (yr) 20 10 20 20 Using Incremental Analysis find the interest rate which will make NPW (A) = NPW (B) (show how you do it) As the General Manager of a Manufacturing Company you are considering to add a new line of products which you anticipate will capture a market share for the next 20 years. You consider two potential options: Option A Option B Investment 900,000 600,000 Annual Benefits 150,000 150,000 Annual O&M 35,000 40,000 100,000 90,000 Salvage Value Line useful Life (yr) Project life horizon (yr) 20 10 20 20 Using Incremental Analysis find the interest rate which will make NPW (A) = NPW (B) (show how you do it)

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