Wayward Airfreight, Inc. has asked
you to determine whether they should purchase a new automatic
parcel sorter or

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Question: Wayward Airfreight, Inc. has asked you to determine whether they should purchase a new automatic …
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whether they should wait to invest
their capital. You have obtained the bids shown in the table
below.

Data   SHIP-R
  
SORT-OF U-SORT

———————————————————————————————————

Useful Life, Years 7 7 7

——————————————————————————————————–

First Cost (FC) $184,000 $235,000   $180,000

———————————————————————————————————-

Salvage Value (SV)
$38,300   $44,800
  
$14,400

———————————————————————————————————-

Annual Benefit (AB)
  
$75,300 $89,000   $68,000

————————————————————————————————————

M&O COST (M&O)
$21,000 $21,000
$12,000

————————————————————————————————————-


Use incremental rate of return to
determine which alternative to choose.   

Use a MARR of 15%.


**PLEASE SHOW WORK TO BE RATED**
A)Wait(do nothing now)
C)SORT-OF
D)SHIP-R

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