2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative are given on the next page. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. State your assumptions. A в Investment cost Estimated units 60,000 20,000 $50,000 18,000 to be sold/year Unit selling price, $/unit Variable costs, $/unit Annual expenses (fixed) Market value Useful life $4.40 $4.10 $1.00 $1.40 $1.15 $15,000 $30,000 $26,000 $20,000 10 years $15,000 10 years PUBLICATIOR ÇLA 10 years
2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative are given on the next page. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. State your assumptions. A в Investment cost Estimated units 60,000 20,000 $50,000 18,000 to be sold/year Unit selling price, $/unit Variable costs, $/unit Annual expenses (fixed) Market value Useful life $4.40 $4.10 $1.00 $1.40 $1.15 $15,000 $30,000 $26,000 $20,000 10 years $15,000 10 years PUBLICATIOR ÇLA 10 years
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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