Reference no: EM133125285

Question 1 - Two mutually exclusive projects with the same service lives of 2 years are characterized by first costs of $100 million and $120 million respectively and annual savings of $60 million and $70 million respectively. If the MARR is 10%, which one should be chosen on the basis of the present worth comparison method?

Question 2 - Marie has a $70 000 budget for upgrading the company's warehouse. She has calculated that the improvements could be completed in three months from now and would consume the entire budget. Due to these improvements the company saves $9 000 by the end of the first year, $14 000 by the end of the second year, and $35 000 by the end of the third year, $54 000 by the end of the fourth year and $17 000 by the end of the fifth year. What is the payback period for this project?

Question 3 - A new computer system costs $20 000 and saves $5 000 per year over a five-year service life. Resale value of the computer is estimated at $5 000 at the end of its service life. If the MARR is 4%, what is the annual net benefits of the computer system?