Question

Wayward Airfreight, Inc. has asked you to determine whether they should purchase a new automatic parcel sorter or whether they should wait to invest their capital. You have obtained the bids shown in the table below.

Data	A	B	C
Useful Life, Years	7	7	7
First Cost	$184,000	$235,000	$180,000
Salvage Value	$38,300	$44,800	$14,400
Annual Benefit ($/yr)	$75,300	$89,000	$68,000
Operating and Maintenance Costs (O&M) ($/yr)	$21,000	$21,000	$12,000

Use a MARR of 15%.

Use the following methods to complete this problem. All work must be done in excel using cell references and formulas:

• Rate of Return Analysis - numerical method
• Choice Table
• Graphical Solution, the graph should be on its own sheet (not embedded on any sheet). The graph should be properly labeled showing the regions where each alternative is shown.

NOTE: I need the most help with the Choice Table. I believe I have done the Rate of Return Analysis correctly. Thank you.

Answer 1