lI Installed cost Net annual revenue Salvage value Useful li

lI Installed cost Net annual revenue Salvage value Useful life Calculated IRR $40,000 $25,000 $20,000 $6,300$5,650$5,300 20 years 14.7% 20 years 22.2% 10 years 23.2%

Solution

Answer:

The most economical alternative is :

B. alternative I

Because the imputed market value of alternative I is greater than its MARR

Formula to calculate Imputed Market Value is :

                           A = I*(A/P,i,N)