Initial cost Annual benefit Salvage value Life O Rave O BBQ Brewery Brewery BBQ $50,000 10000 25000 6 years Rave $100,000 $12,000 15000 5000 35000 -5000

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter2: Using Financial Statements And Budgets
Section: Chapter Questions
Problem 5FPE
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Economics
Dr. P is looking to supplement his income by doing some 'development' on Second Street. If his
MARR is 10%, which alternative should he pursue? Use any method you wish of the 'Big 3' to
calculate which alternative is the best at MARR of 10%.
Brewery
BBQ
Rave
Initial cost
$50,000 $100,000 $12,000
Annual benefit
10000
15000
5000
Salvage value
25000
35000
-5000
Life
6 years
O Rave
O BBQ
Brewery
O None of the Above
Transcribed Image Text:Economics Dr. P is looking to supplement his income by doing some 'development' on Second Street. If his MARR is 10%, which alternative should he pursue? Use any method you wish of the 'Big 3' to calculate which alternative is the best at MARR of 10%. Brewery BBQ Rave Initial cost $50,000 $100,000 $12,000 Annual benefit 10000 15000 5000 Salvage value 25000 35000 -5000 Life 6 years O Rave O BBQ Brewery O None of the Above
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