Assignment 5
Evaluation Criteria using IRR
Ace Welding Services, Inc. has expanded their machine acquisition to five alternative machines/processes. Ace has adopted a planning horizon of four years and all options can last this long. Their MARR is now 10%. The data is shown below. Recommend a single choice for management that uses the internal rate of return criterion. Submit your solution in a spreadsheet.
Alternatives
Investment in year 0
Annual Cash Flow
Salvage value in year 4
1 $50,000
$18,000
$0
2 $250,000
$85,000
$75,000
3 $350,000
$105,000
$125,000
4 $600,000
$150,000
$400,000
5 $800,000
$165,000
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