Explain mutually exclusive investment opportunities
Econometrics
Suppose A through F constitute a set of feasible, mutually exclusive investment opportunities. Assume Do Nothing is not an option (i.e. must pick from A through B). Using (1) Present Worth, (2) Annual Worth (EAW), (3) Future Worth, (4) IRR, (5) B/C Ratio, (6) Payback, and (7) Discounted Payback.
First cost is accrued at end-of-year zero.
Annual benefit is accrued at end-of-years 1-15. MARR is 7%.
A B
Initial Cost $3,000 $5,000
Anual Cost $400 $630
Salvage Value $250 $0
Useful Life 15 years 15 years
Which would be chosen?
