The local police department is considering two types of sidearms for its officers. The Glock 40 costs $400 apiece and has a life of 5 years. The other option is a Sauer 45 that costs $800 and has a...

The local police department is considering two types of sidearms for its officers.

The Glock 40 costs $400 apiece and has a life of 5 years. The other option is a Sauer

45 that costs $800 and has a 10-year life. The Sauer pistol has a residual value of

$200 at the end of its 10-year service life. Assume repeatability and compute the

internal rate of return on the incremental cash flow of the two pistols. If the

department uses a MARR of 5% per year, is the Sauer 45 the better choice?

Extracted text: po Eng Eco.pdf O File | C:/Users/jamie/Desktop/2%20MIDTERM/Eng%20Eco.pdf (D Page view A Read aloud V Draw E Highlight O Erase 47 of 60 Assessment Task 6 (Sullivan, Wicks and Koelling, 2015) 1. Useful lives are unequal among the alternatives The local police department is considering two types of sidearms for its officers. The Glock 40 costs $400 apiece and has a life of 5 years. The other option is a Sauer 45 that costs $800 and has a 10-year life. The Sauer pistol has a residual value of $200 at the end of its 10-year service life. Assume repeatability and compute the internal rate of return on the incremental cash flow of the two pistols. If the department uses a MARR of 5% per year, is the Sauer 45 the better choice? 2. Personal Finances A certain U.S. government savings bond can be purchased for $7,500. This bond will be worth $10,000 when it matures in 5 years. As an alternative, a 60-month certificate of deposit (CD) can be purchased for $7,500 from a local bank, and the CD yields 6.25% per year. Which is the better investment if your personal MARR is 5% per year? 3. Useful lives are equal to the study period At the Motorola plant in Mesa, Arizona, it is desired to determine whether one- inch-thick insulation or two-inch-thick insulation should be used to reduce heat loss from a long section of steam pipe. The heat loss from this pipe without any insulation would cost $2.00 per linear foot per year. The one-inch insulation will eliminate 88% of the heat loss and will cost $0.60 per foot. Two-inch insulation will eliminate 92% of the heat loss and will cost $1.10 per foot. The steam pipe is 1,000 feet in length and will last for10 years. MARR = 6% per year. Which insulation thickness should be recommended?