Expert Answers

Show present worth on incremental investment calculations and identify the best alternative. Show your work.

Methodology: Assume the 1st alternative is the current best for j=2 to the number of alternatives
Compare the candidate to the current best then make the jth alternative the current best
#8 A0 A1 A8 A9 A2 A6 A10 A14
Investment 0 200000 450000 650000 750000 950000(NNN) NNN-NNNN1400000
Annual Rev 0 250000 200000 450000 500000 560000 700000 760000
Annual Cost 0 50000 40000 90000 20000 30000 60000 70000
Salvage Cost 0 0 50000 50000 0 0 50000 50000

1 0 200000 450000 650000 750000 950000(NNN) NNN-NNNN1400000
2 0 200000 160000 360000 480000 530000 640000 690000
3 0 200000 160000 360000 480000 530000 640000 690000
4 0 200000 160000 360000 480000 530000 640000 690000
5 0 200000 160000 360000 480000 530000 640000 690000
6 0 200000 210000 410000 480000 530000 690000 740000

After tax MARR
0.12