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Your company needs to buy a new delivery vehicle, and you're considering three different options: X, Y, and Z. Each has a different capacity and
Your company needs to buy a new delivery vehicle, and you're considering three different options: X, Y, and Z. Each has a different capacity and therefore a different annual profit. Your MARR is 15% and doing nothing is not an option. Initial Cost Annual Profit Salvage Value Useful Life Vehicle X $10,000 $2,500 $500 Vehicle Y $13,000 $3,200 $400 Vehicle Z $15,000 $3,500 $750 8 Using incremental analysis and the IRR answer the following questions: a) Which vehicle would you choose as the base alternative? b) Analyze the difference between the base alternative and the second choice alternative. c) Analyze the difference between the current base alternative and the third-choice alternative. a) Which vehicle would you choose as the base alternative? O A. Vehicle X OB. Vehicle Y O C. Vehicle Z b) Analyze the difference between the base alternative and the second-choice alternative IRRAU-D = % (Round to 1 decimal place) c) Analyze the difference between the current base alternative and the third choice alternative IRR A -D % (Round to 1 decimal place) d) Which vehicle should you choose? O A. Vehicle X Click to select your answer(s)
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