You are to evaluate alternative equipment investments given the information below. You are to compare the presented equipment investments across a range of MARR values.

Data:

Data Krax Seamer Split-Co Seamer

Life (years) 9 9

Purchase Price $ 202,000 $ 285,000

Annual Benefits $ 73,000 $ 88,000

Benefits Gradient $ 1,200 $ 1,300

Annual O&M Costs $ 18,000 $ 34,000

O&M Gradient $ 600 $ 1,100

Salvage Value $42,000 $48,000

Loan Krax Seamer Split-Co Seamer

Down Payment (% of Purchase Price) 30% 30%

Loan Period (years) 6 9

Loan Payment $34,392.11 $37,441.93

Calculate the following utilizing Excel:

A. Note your analysis must be descriptive as to what you are doing, what type of analysis is involved, what your decision criteria will be.

B. Your discussion must discuss an evaluation of the data, what the data is telling you and what are the consequences resulting from a range of possible MARRs. Select a MARR and discuss what alternative is selected based upon that MARR. If the MARR that is selected could vary up to +/- 5% what are the consequences based upon your decision criteria.

C. Conclude your discussion with a recommendation.

Turn in one Excel file. Clearly outline the various cash flow tables. Structure the problem as a table organized by various MARR values. Embed the questions (A-C) in the spreadsheet and clearly state the solutions for each question. You will be graded on formatting and appearance it needs to look professional. Design how the problem solutions will be designed/look prior to starting the problem. Use the power of Excel!!!