Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely
The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below. End of Year Gate 1 Gate 2 Gate 3 0 -$15,000 -$19,000 -$24,000 1 -$6,500 -$5,600 - $4,000 2 -$6,500 $5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4. -$6,500 -$5,600 -$4,000 5 - $6,500 + $0 -$5,600 + $2,000 -$4.000 + $5,000 Show the comparisons and internal rates of return used to make your decision: Comparison 1: Gate 2 versus Gate 1 IRR 1: 1.43 % Comparison 2: Gate 3 versus Gate 1 IRR 2: 1.43 Using an internal rate of return analysis with a MARR of 20%/year, determine the preferred gate. Gate 3 Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is +0.2
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started