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Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a $130,000 first cost. A similar one with many
Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a $130,000 first cost. A similar one with many extra features, B has a $508,000 first cost. Awill save $50,000 per year over the cutter currently in use. B will save $140,000 per year. Each clicker cutter will last five years. If the MARR is 10 percent, which alternative is better? Use an IRR comparison. For the increment from the donothing alternative to cutter A, the IRR is :l percent. For the increment from cutter A to cutter B, the IRR is :l percent. Therefore, |:| should be chosen
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