Question
Q2. Best Flight, Inc., is considering three mutually exclusive alternatives for implementing an automated passenger check-in counter at its hub airport. Each alternative meets
Q2. Best Flight, Inc., is considering three mutually exclusive alternatives for implementing an automated passenger check-in counter at its hub airport. Each alternative meets the same service requirements, but differences in capital investment amounts and benefits (cost savings) exist among them. The study period is 10 years, and the useful lives of all three alternatives are also 10 years. Market values of all alternatives are assumed to be zero at the end of their useful lives. Which alternative should be selected in view of the following estimates? Alternative A Capital Investment 390000 Alternative B 920000 Alternative 660000 Annual 69000 167000 133500 cost savings The useful life of each alternative in this example is 10 years. Rate equal 10% per year.
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