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Your local foundry is adding a new furnace. There are several different styles and types of furnaces, so the foundry must select from among a
Your local foundry is adding a new furnace. There are several different styles and types of furnaces, so the foundry must select from among a set of mutually exclusive alternatives. Initial capital investment and annual expenses for each alternative are given in the table below. None have any market value at the end of its useful life. Using a MARR of 15%, which furnace should be chosen? Furnace FI F2 F3 Investment $110,000 $125,000 $138,000 Useful life 10 years 10 years 10 years Total annual $53.800 $51,625 $45.033 expenses 5pts each. A. Present worth method? B. Annual worth method? C. Future worth method? D. Benefit-cost ratio method
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