Unformatted text preview: b) Give 2 examples on where the repeatability assumptions may hold. Problem 2: A consulting firm proposed three possible improvements on a dilapidated service facility. The alternatives given ranged from band-aid to long-term solutions wherein the details are summarized in the tables below: A B C Capital Investment 30,000 20,000 50,000 Useful Life 2 3 5 Annual Expenses 1,000 4,000 2,500 Market Value 2,500 10,000 a) Which deal proposal would minimize long term expenses? b) How much discount (to the capital investment cost) should be applied to the losing alternatives so that it would be equally attractive with the best alternative?...
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- Spring '11
- Capital Investment, long term expenses, total revenue equation, dilapidated service facility., repeatability assumptions