Question
Three systems are being considered for a manufacturing plant. The estimated benefits and costs expected to be derived from the three alternatives under consideration are
Three systems are being considered for a manufacturing plant. The estimated benefits and costs expected to be derived from the three alternatives under consideration are listed as follows:
Countermeasure | Alternative 1 | Alternative 2 | Alternative 3 |
Initial Cost | $ 5,500,000 | $ 6,000,000 | $ 7,500,000 |
Annual Revenue | $ 1,500,000 | $ 1,750,000 | $ 2,000,000 |
Annual Maintenance Costs | $ 125,000 | $ 175,000 | $ 225,000 |
Annual Utility Costs | $ 175,000 | $ 225,000 | $ 275,000 |
Annual Labor Expenses | $ 150,000 | $ 200,000 | $ 250,000 |
The interest rate is 10%, and the life of each project is estimated to be 10 years. Select the best alternative, according to BC(i)
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