Required rate of return is 15%.

1. Assume that the constrained resource such as factory can be RE-USED INDEFINITELY at the end of each models life. What model should be chosen and why?

2. Regardless of the condition whether the resources can be re-used or not, what model should be chosen and why if the NPV method is used?

4. CROC Co., is considering a new milling machine. They have narrowed the choices down to two alternatives of Economy and Deluxe models. The relevant data are shown in the table below. 2 41 ECONOMY $ 175,000.00) $ 21,000.00 $ 32,000.00 $ 32,000.00 $ 24,000.00 DELEUXE $(220,000.00) $ 145,000.00 $ 126,000.00 0 1 3