Minimum attractive rate of return

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Minimum Attractive Rate of Return:

Use Present Worth analysis and determine which of the following two machines should be selected based on their incremental cash flows and a minimum attractive rate of return (MARR) of 11% per year. Compute the actual rate of return to within plus or minus 0.1% using Microsoft EXCEL.

Item

Machine A

Machine B

First cost, $

-43,000

-65,000

Annual operating cost, $/year

-14,500

-9,000

Salvage value, $

10,500

17,000

Life, years

5

10

Reference no: EM131116891

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