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Sarao Motors will retools an old jeep assembly plant in Las Pinas to produce a modern electric jeepney model that meets new regulatory requirements. Sarao
Sarao Motors will retools an old jeep assembly plant in Las Pinas to produce a modern electric jeepney model that meets new regulatory requirements. Sarao is seeking additional sources for dies needed to fabricate new mechanical parts. Two Laguna- based vendors make the required dies. Use the estimates below and an MARR of 12% per year to select the more economical vendor bid. Autobot Decepticon Initial Cost (80,000) (130,000) Annual Maintenance Cost (35,000) (16,000) Salvage Value O 20.000 Useful Life 10 5 QUESTION: Using a 10-year study period for the Sarao project, compare the two alternatives using the IRR method. What is the incremental IRR in percent (round off to 2 decimal places)? Assuming that study period for the Sarao plant upgrade is 10 years, which assumption is applied for Decepticon? O None of the choices apply O Compatibility O Co-terminated O Repeatability O All of the choices apply Assuming Sarao's project is evaluated for the period of 5 years, which assumption is applied? O Repeatability O All of the choices apply O Compatibility O Co-terminated O None of the choices apply Using a 10-year study period for the Sarao project, compare the two alternatives using the IRR method. Which alternative should Sarao choose? Using a 10-year study period for the Sarao project, compare the two alternatives using the IRR method. Is there an option qualified to be the base alternative? O NO O Yes
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