X=200,000

Y=400,000

Z=5

W=8

P=15

2) A technology company is planning to purchase one of two chips. Due to the pace of technological change in this area, it is realistic to assume that these are one-shot investments. The expected cash flows for each machine are shown below. MARR is P % per year. Which alternative is preferred (use FW analysis) Alternative 1 Alternative 2 Initial SRX SRY investment Expected life Z years W years Salvage Value SR 35,000 0 Annual Income SR 60,000 SR 85,000 Annual SR 30,000 SR 15,000 Expense