The Aubey Coffee Company is evaluating the within-plantdistribution system for its new roasting, grinding, and packingplant. The two alternatives are (1) a conveyor system with a highinitial cost but low annual operating costs and (2) severalforklift trucks, which cost less but have considerably higheroperating costs. The decision to construct the plant has alreadybeen made, and the choice here will have no effect on the overallrevenues of the project. The cost of capital for the plant is 11%,and the projects' expected net costs are listed in the followingtable:
The IRR of alternative 1 is -Select undefined 9% 11% 13%
The IRR of alternative 2 is -Select undefined 9% 11% 13%
Alternative 1: $
Alternative 2: $
Which method should be chosen?
The Aubey Coffee Company is evaluating the within-plant distribution system for its new roasting, grinding, and packing
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answerhappygod
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