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degrees, for increasing the recovery of a precious metal from its melting process. The following data concern capital investment requirements and estimated annual savings of
degrees, for increasing the recovery of a precious metal from its melting process. The following data concern capital investment requirements and estimated annual savings of both alternatives: The firm's MARR for its risk-free investment is 15% per year. According to the Atlas Corporation's engineering economy handbook, the risk-adjusted MARR applied to A will be 25% per year and the risk-adjusted MARR for B has been set at 16% per year. Answer each of the following parts independently: The firm's MARR for its risk-free investment is 15% per year. According to the Atlas Corporation's engineering economy handbook, the risk-adjusted MARR applied to A will be 25% per year and the risk-adjusted MARR for B has been set at 16% per year. Answer each of the following parts independently. a. Which alternative should be recommended without considering the uncertainty? b. Which alternative has higher uncertainty? Why? c. Which alternative should be recommended considering the uncertainty? d. Suppose alternative A has an additional value (saving or cost) of $X in year 2 . What should be the value of X so that the company becomes indifferent between the two alternatives? Answer this part considering the uncertainty
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