Which alternative should be selected at the marr

Reference no: EM13224700

A firm is considering two alternatives that have no salvage value.

A
Initial Cost $10,700
Uniform Annual Benefits 2,100
Useful life, in years 8

B
Initial Cost $5,500
Uniform Annual Benefits 1,800
Useful life, in years 4
At the end of 4 years, another B may be purchased with the same cost, benefits, and so forth.

(a) Construct a choice table for interest rates from 0% to 100%
(b) If the MARR is 10%, which alternative should be selected?

Reference no: EM13224700

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