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Your company is considering adding a new packaging line to increase capacity. There are 3 different configurations that will meet your design requirements, so your

Your company is considering adding a new packaging line to increase capacity. There are 3 different configurations that will meet your design requirements, so your management must evaluate from among this set of three mutually exclusive alternatives. Initial capital investment, revenues, and annual expenses for each alternative are given in the table below, along with the end of life market value. Using a MARR of 10%, which packaging line should be chosen?

Packaging Line

1

2

3

Investment

$100,000

$115,000

$200,000

Revenue

$45,000

$60,000

$85,000

Useful Life

10 Years

10 Years

10 Years

Total Annual Expense

$20,000

$30,000

$40,000

Market Value

$20,000

$25,000

$30,000

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