Question
You will be buying one new piece of equipment for your plant. You have researched three options. Your boss has asked you to make a
You will be buying one new piece of equipment for your plant. You have researched three options. Your boss has asked you to make a recommendation based on IRR. This will require you to use Defender/Challenger Analysis (incremental analysis). All options have a five-year life and no salvage value. The company uses an MARR of 10%
Option A has first cost of $11,000 and will generate revenues of $3,200 annually.
Option B has a first cost of $16,000 and will generate revenues of $4,500 annually.
Option C has a first cost of 19,000 and will generate revenues of $5,500 annually.
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