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K Development projects done by Standalone Products are subsidized by a govemment grant program. The program pays 30 percent of the total cost of the project (costs summed without discounting Le, the interest rate is zero), half at the beginning of the project and half at the end, up to a maximum of $100,000. There are two projects being considered. One is a customized checkweigher for cheese products and the other is an automated production scheduling system. Each project has a service life of five years. Costs and benefits for both projects, not including grant income, are shown below. Only one can be done, and the grant money is certain, Standalone Products has a MARR of 9 percent for projects of this type. Using an appropriate rate of retum method, which project should be chosen? First cost Annual costs Annual benefits Salvage value Checkweigher $32,000 $4.800 $15,000 $8,000 Scheduler $9,000 $13,000 $18.000 SO The appropriate increment investment from one project to the other has an IBB of percent. Therefore, (Type an integer or decimal rounded to one decimal place as needed.) should be chosen

K Development projects done by Standalone Products are subsidized by a govemment grant program. The program pays 30 percent of the total cost of the project (costs summed without discounting Le, the interest rate is zero), half at the beginning of the project and half at the end, up to a maximum of $100,000. There are two projects being considered. One is a customized checkweigher for cheese products and the other is an automated production scheduling system. Each project has a service life of five years. Costs and benefits for both projects, not including grant income, are shown below. Only one can be done, and the grant money is certain, Standalone Products has a MARR of 9 percent for projects of this type. Using an appropriate rate of retum method, which project should be chosen? First cost Annual costs Annual benefits Salvage value Checkweigher $32,000 $4.800 $15,000 $8,000 Scheduler $9,000 $13,000 $18.000 SO The appropriate increment investment from one project to the other has an IBB of percent. Therefore, (Type an integer or decimal rounded to one decimal place as needed.) should be chosen

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter1: Introduction: What This Book Is About
Section: Chapter Questions
Problem 1.1IP
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K Development projects done by Standalone Products are subsidized by a govemment grant program. The program pays 30 percent of the total cost of the project (costs summed without discounting Le, the interest rate is zero), half at the beginning of the project and half at the end, up to a maximum of $100,000. There are two projects being considered. One is a customized checkweigher for cheese products and the other is an automated production scheduling system. Each project has a service life of five years. Costs and benefits for both projects, not including grant income, are shown below. Only one can be done, and the grant money is certain, Standalone Products has a MARR of 9 percent for projects of this type. Using an appropriate rate of retum method, which project should be chosen? First cost Annual costs Annual benefits Salvage value Checkweigher $32,000 $4.800 $15,000 $8,000 Scheduler $9,000 $13,000 $18.000 SO The appropriate increment investment from one project to the other has an IBB of percent. Therefore, (Type an integer or decimal rounded to one decimal place as needed.) should be chosen
Transcribed Image Text:K Development projects done by Standalone Products are subsidized by a govemment grant program. The program pays 30 percent of the total cost of the project (costs summed without discounting Le, the interest rate is zero), half at the beginning of the project and half at the end, up to a maximum of $100,000. There are two projects being considered. One is a customized checkweigher for cheese products and the other is an automated production scheduling system. Each project has a service life of five years. Costs and benefits for both projects, not including grant income, are shown below. Only one can be done, and the grant money is certain, Standalone Products has a MARR of 9 percent for projects of this type. Using an appropriate rate of retum method, which project should be chosen? First cost Annual costs Annual benefits Salvage value Checkweigher $32,000 $4.800 $15,000 $8,000 Scheduler $9,000 $13,000 $18.000 SO The appropriate increment investment from one project to the other has an IBB of percent. Therefore, (Type an integer or decimal rounded to one decimal place as needed.) should be chosen
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