The cost and economic projections for three machines is tabulated below. Using an annual MARR of 20% and an Equivalent Uniform Annual Worth method of analysis, determine the Incremental Rate of Return...

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The cost and economic projections for three machines is tabulated below. Using an annual MARR of 20% and an Equivalent Uniform Annual Worth method of analysis, determine the Incremental Rate of Return for the machine, which should be purchased.

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Answered Same DayDec 21, 2021

Answer To: The cost and economic projections for three machines is tabulated below. Using an annual MARR of 20%...

Robert answered on Dec 21 2021
117 Votes
Solution:
EUAC = -Initial cost + (Revenue - O & M) (P/A, r%, n) + Salvage value (P/F, r%, n)
Machine A
EUAC = -270,000 + (150,000 -19,000) (P/A, r%, 4) + 108,000 (P/F, r%, 4)
= -270,000 + 131,000 (P/A, r%, 4) + 108,000 (P/F, r%, 4)
At r% = 40%,
EUAC = 362.35
At r% = 41%,
EUAC = -4000.76
By...
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