Based on an internal rate of return analysis

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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:

Based on an internal rate of return analysis, which polisher should be recommended?

Reference no: EM13742070

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