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Paragon, a road construction company, must purchase a new paver to meet the growing demands for highway construction and resurfacing. The key parameters of the

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Paragon, a road construction company, must purchase a new paver to meet the growing demands for highway construction and resurfacing. The key parameters of the three pavers under scrutiny are provided below. Parameters A99 B88 C77 1. Initial Cost ($) 380,000 400,000 425,000 $290,000 at $300,000 at $310,000 from EOY1 increasing EOY1 EOY1 by $3,000 increasing by decreasing by 2. Revenues ($) annually 1% annually 3.0% annually thereafter thereafter. thereafter $125,000 at $175,000 at $185,000 at EOY1 EOY1 EOY1 3. Operating Costs decreasing by decreasing by decreasing by ($) $1,000 annually 2% annually $2,500 annually thereafter. thereafter thereafter 4. End-of-life salvage value ($) -6,000 45,000 30,000 5. Useful life (years) 3 years 4 years 6 years . All parameter values are fictitious. . . EOY = End-of-year Industry Standard = 2.5 years . MARR = 10%

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