Three mutually exclusive projects are being considered:
|
|
A
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B
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C
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Initial cost
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$100
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$15
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$200
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|
Annual benefit
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$10
|
$17.62
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$55.48
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|
Useful life
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Infinite
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20 years
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5 years
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a) Construct a choice table for interest rates from 0%-100%. Also - provide a plot of either PW or EAW as function of i.
b) The firm wants 8% rate of return on investments. Which equipment should be purchased?