Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each alternative has an expected life of 10 years and no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,465. Polisher 2 requires an initial investment of $10,000 and provides annual benefits of $1,770. Polisher 3 requires an initial investment of $15,000 and provides annual benefits of $3,580. MARR is 15%/year.
Show the comparisons and internal rates of return used to make your decision
Comparison 1: Polisher 1 vs Polisher 2 , IRR 1:
Comparison 2: Polisher 1 vs Polisher 3, IRR 2:
Comparison 3: Polisher 2 vs Polisher 3, IRR 3:
Comparison 4: No Polisher vs Polisher 1, IRR 4:
Comparison 5: No Polisher vs Polisher 2, IRR 5:
Comparison 6: No Polisher vs Polisher 3, IRR 6: