Determine the most desirable alternative based on the result

Reference no: EM13552839

CARP, Inc. wants to evaluate two methods of shipping their products. The following cash flows are associated with each alternative:

Data A |B life(years) 10 |10

first cost $700,000 |$1,512,000

M&O $18,000 |$9,000

M&O gradient $900 |$775

Annual benefit $154,000 |$303,000

salvage value $142,000 |$210,000

Annual rare based on amount of products which can ordinarily be shipped each year as a function of the amount of vehicles or service purchased with the first cost and the M&O costs. Using a MARR of 15%, calculate the equivalent uniform annual cash flow (EUAB-EUAC) for each alternative; determine the most desirable alternative based on the results.

Reference no: EM13552839

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