Question

The PW-based relation for the incremental cash flow series to find Δi* between the lower first-cost alternative X and alternative Y has been developed.

0 = -20,000 + 9000(P/A,Δi*,10) + ( -4000(P/F,Δi*,10))

Determine the highest MARR value for which Y is preferred over X.

Any MARR value greater than ______% favors Y.

Answer 1

Given,

When, incremental rate lies in between 43% to 45%

20 = 9*(P/A,45%,10) - 4*(P/F,45%,10)

Then right hand side is Equal to 19.42

When rate is 43% the right hand side is Equal to 20.43

Thus, rate lies in between 43% to 45%.

When rate lies in between 43% to 45% Select, most expensive one.

Select Y.

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