There are four mutually exclusive alternatives that are candidates for implementation by the Yellow Freight Company's sorting operations center, and doing nothing is not an option. All alternatives have a life of 10 years, and they have negligible market (salvage) value after 10 years. The firm's MARR is 10% per year. If you are to use the IRR method to make your recommendation, rank order the alternatives in the order they should be evaluated.
Correct answer:
1.
Alternative C
Capital Investment: $540,000
Annual Expenses: $420,000
2.
Alternative A
Capital Investment: $740,000
Annual Expenses: $361,940
3.
Alternative B
Capital Investment: $1,840,000
Annual Expenses: $183,810
4.
Alternative D
Capital Investment: $2,000,000
Annual Expenses: $100,000
Please provide step by step solution to get to that correct answer.
There are four mutually exclusive alternatives that are candidates for implementation by the Yellow Freight Company's sorting operations center, and doing nothing is not an option. All alternatives have a life of 10 years, and they have negligible market (salvage) value after 10 years. The firm's MARR is 10% per year. If you are to use the IRR method to make your recommendation, rank order the alternatives in the order they should be evaluated.
Correct answer:
| 1. Alternative C |
| 2. Alternative A |
| 3. Alternative B |
| 4. Alternative D |
Please provide step by step solution to get to that correct answer.
