Question
The CA Company, an information system consulting firm is attempting to evaluate the profitability of a new project of extending its current information system hardware.
The CA Company, an information system consulting firm is attempting to evaluate the profitability of a new project of extending its current information system hardware. There are three mutually exclusive proposals available for this proposed extension. It is known that the CA Company considers proposals with minimum 15% annually compounding return. Three Proposed Mutually Exclusive Alternatives are profiled as follow:
| Proposal-X | Proposal-Y | Proposal-Z | |||
| Initial Investment | $ 40,000 | $60,000 | $52,000 | ||
| Annual Revenue | $21,000 | $28,000 | $28,600 | ||
| Annual Expenses | $11,100 | $12,500 | $12,100 | ||
| Natural Life | 7 Years | 7 Years | 7 Years | ||
| Salvage @ EOL | $1,500 | $2,400 | $900 |
Which alternative should be selected if the decision is done based on only Net Equivalent Worth?
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College Mathematics For Business Economics, Life Sciences, And Social Sciences
Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker
14th Edition
0134674146, 978-0134674148
