Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are giv

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Three Mutually Exclusive Design Alternatives Are Being Considered The Estimated Cash Flows For Each Alternative Are Giv 1 (168.43 KiB) Viewed 13 times

Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given in Table 2. The MARR is 12% per year. At the conclusion of the useful life, the investment will be sold. Table 2: Comparison data for three mutually exclusive alternatives Alternatives A Investment cost Annual expenses Annual revenues Market value Useful life RM28,000 RM15,000 RM23,000 RM6,000 10 years B RM55,000 RM13,000 RM28,000 RM8,000 10 years C RM40,000 RM14,000 RM32,000 RM10,000 10 years (a) Compare the three mutually exclusive alternatives, you may decide to select one of these alternatives or decide to select none of them. Make a recommendation using the annual worth (AW) method. [15 Marks] [C5] (b) If the MARR is 6% per year, use present worth (PW) method to determine which machine should be recommended. [15 Marks] [C5]