Use an interest rate of 10% per year. Alternative А В First cost, $ -50,000 -80,000 Annual cost, $/year -20,000 - 10,000 Salvage value, $ Life, years 10,000 25,000 3

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 4BE: Internal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of...
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The equivalent annual worth of alternative A is closest to:
a. $-25,130
b. $-37,100
c. $-41,500
d. $-42,900

Use an interest rate of 10% per year.
Alternative
А
В
First cost, $
-50,000
-80,000
Annual cost, $/year
-20,000
- 10,000
Salvage value, $
Life, years
10,000
25,000
3
Transcribed Image Text:Use an interest rate of 10% per year. Alternative А В First cost, $ -50,000 -80,000 Annual cost, $/year -20,000 - 10,000 Salvage value, $ Life, years 10,000 25,000 3
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