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Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each altemative has an expected life of 10 years and no salvage value.
Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each altemative has an expected life of 10 years and no salvage value. Polisher 1 requires an initial investment of 20,000 and provides annual benefits of $4,465. Polisher 2 requires an initial investment of $10,000 and provides annual benefits of $1,770. Polisher 3 requires an initial investment of $15,000 and provides annual benefits of $3,580. MARR is 15%/year. Show the comparisons and internal rates of return used to make your decision 18. 1 Comparison 1: UNo polisher versus Polisher 1 , RR 1: No polisher versus Polisher 2 12 RR 2: No polisher versus Polisher 3 20 Comparison 3: Based on an internal rate of return analysis, which polisher should be recommended? Polisher 3 carry al interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is 0.2. RR 3
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