ENG106W12-Q4makeup-solution

ENG106W12-Q4makeup-solution - -$1,000 -$1,400-$400 1 +400...

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ENG 106 Winter ‘12 Open Notes Quiz #4 Name: Two mutually exclusive (ME) alternatives have the following cash flows: Alternatives Year A B 0 -$1,000 -$1,400 1 +400 +550 2 +400 +550 3 +400 +550 We want to choose one of the alternatives. a) Set up the equation to solve for the rate of return on the increment of investment, but do not solve . Set up increment as an investment, B - A Alternatives Increment Year A B B - A 0
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Unformatted text preview: -$1,000 -$1,400-$400 1 +400 +550 +150 2 +400 +550 +150 3 +400 +550 +150 PW B-A = 0 = -400 + 150 X + 150 X 2 + 150 X 3 where X = (1 + i)-1 or 0 400 150 150 400 1 150 b) Given a MARR, what would be the criteria to accept one of the alternatives? If i* > MARR accept B If i* < MARR keep A...
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This note was uploaded on 04/03/2012 for the course ENGIN 106 taught by Professor Fizali during the Spring '12 term at Laney College.

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