T h e est i m a t e d m a r k e t v a l u e of a l t

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Unformatted text preview: r s. T h e est i m a t e d m a r k e t v a l u e of A l t e r n a t i v e A a t e n d of y e a r 25 is $1,000. A ssu m e M A R R = 15 % p e r y e a r . C a p i t a l I n v es t m e n t A n n u a l E x p e n ses U s e f u l l i f e ( y e a r s) S a l v a ge V a l u e a t e n d o f u se f u l l i f e A lte r native A $12,000 $2,200 10 y e a r s $5,000 A lte r native B $30,000 $1,000 25 y e a r s $10,000 U si n g t h e cot e r m i n a t e d assu m p t ion w i t h s t u d y p e r iod 25 y e a r s, d e t e r m i n e w h i c h st r u c t u r e is b e t t e r b y u si n g e q u i v a l e n t w o r t h m e t hod...
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This note was uploaded on 01/20/2012 for the course INDUSTRIAL 343 taught by Professor Capponi during the Spring '11 term at Purdue University.

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