The plant manager at a small machine shop is considering three project proposals, with cash flows as shown in the table below. All proposed projects have a 20 year useful life and the company has a MARR of 12%/

Determine which if any, of the proposals should be selected if they are mutually exclusive projects.

The do nothing alternative is viable.

Solution must be based on a Rate of Return analysis.

Proposal Initial Cost, $ Annual net savings, $/yr Proposal's Annual Rate of Return 50,000 7,500 13.9% 22,000 15,000 3,0772,403 12.7% 15.0%