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Business, 06.05.2020 03:11 SavageKidKobe

Compare the two following two alternatives using a MARR of 12%. The repeatability assumption is not acceptable so you must use the imputed market value technique and external rate of return. The study period is six years.

a. Aternative I: Initial investment of $45,000, net revenue the first year of $8,000, increasing $4,000 per year for the six year useful life. Salvage value is estimated to be $6500 at the end of six years.

b. Alternative II: Initial investment of $60,000, uniform annual revenue of $12,000 for the nine year useful life. Salvage value is estimated to be $9,000 at the end of nine years.

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