Which is the most desirable alternative

Reference no: EM13180739

Two hazardous environment facilities are being evaluated, with the projected life of each facility being 10 years. The cash flows for each facility are shown in the table below.

The company uses a MARR of 14%. Based on the rate of return, which is the most desirable alternative?

Cash Flows Alternatives

A B

First Cost $450,000 $615,000

M & O Costs $15,000 $10,000

Annual Benefit $85,000 $158,000

Salvage Value $45,000 $65,000

Reference no: EM13180739

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