Business, 13.07.2020 21:01 jimennacastillo15

The Ford Motor Company is considering three mutually exclusive electronic stability control systems for protection against rollover of its automobiles. The investment period is four years (equal lives) and the MARR is 12% per year. Data for fixturing costs of the system are given below. Alternative A
IRR = 19.2&
CAPITAL INVESTMENT = $12,000
NET ANNUAL RECEIPT = $4,000
SALVAGE VALUE = $3,000

Alternative B
IRR = 18
CAPITAL INVESTMENT = $15,800
NET ANNUAL RECEIPT = $5.200
SALVAGE VALUE = $3,500

Alternative C
IRR = 19.2&
CAPITAL INVESTMENT = $8,000
NET ANNUAL RECEIPT = $3.000
SALVAGE VALUE = $1,500

Required:
Which alternative is best and why?

Answers: 3

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