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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 398 Weeks Ago, 3 Days Ago |
| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
The E. F. Fedele Company is considering acquiring an automatic screwing machine for its assembly operation of a personal computer. Three different models with varying automatic features are under consideration. The required investments are $360,000 for model A, $380,000 for model B, and $405,000 for model C. All three models are expected to have the same service life of eight years. The following financial information, in which model (B – A) represents the incremental cash flow determined by subtracting model A’s cash flow from model B’s, is available:
ModelIRR (%)A30%B15C25ModelIncremental IRR (%)(B - A)5%(C - B)40(C – A)15If the firm’s MARR is known to be 12%, which model should be selected?
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