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Two mutually exclusive alternatives are being considered to buy environmental protection equipment at a petroleum refinery facility. One of the alternatives must be chosen and
Two mutually exclusive alternatives are being considered to buy environmental protection equipment at a petroleum refinery facility. One of the alternatives must be chosen and the repetitivity assumption applies. The company uses a MARR of 12%. The estimated cash flows are presented as follows: Equipment Equipment Y Capital investment $20,000 $38,000 Annual expenses 5,500 3,500 Salvage value 1,000 4,200 Useful life (years) 5 10 What is the best alternative using the present worth method? In the detailed solution, make sure you do the following: mention what is the appropriate decision criteria draw the cash flow diagrams present the equivalency models show all calculations. Seleccione una: a. Equipment b. Equipment Y
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