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You are considering improving your plant. You have 2 alternatives to choose from. Alternative A: an investment of $10,000 that will reduce your annual operating
You are considering improving your plant. You have 2 alternatives to choose from. Alternative A: an investment of $10,000 that will reduce your annual operating expenses by $4,000 for the first 2 years and in $3,000 for years 3-4. Alternative B: an investment of $3,000 that will reduce your annual operating expenses by $3,600 for one year only. The discount rate is 8%. As the plant's financial consultant, which alternative will you recommend and why? Please use blank space to show all your work
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Which alternative do you recommend? |
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