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Lec%2023_Full

Lec%2023_Full - IE 343 Engineering Economics Lecture 23...

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IE 343 Engineering Economics Lecture 23: Chapter 6 - Comparison and Selection among Alternatives Instructor: Tian Ni Oct.21, 2011 IE 343 Fall 2011 1
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Step 1. Order the alternatives by increasing capital investment . Step 2. Find a base alternative (current best alternative) Cost alternatives: the first alternative in the ordered list (the one with the least capital investment). Investment alternatives: the first acceptable (profitable) alternative in the ordered list (EW 0, or IRR MARR). Note: the IRR of the DN (Do-Nothing) is assumed to be the MARR. IE 343 Fall 2011 The Incremental Analysis Procedure 2
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