You are presented with three proposals. Proposal 1 includes a first cost of 5,000 $...
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Accounting
You are presented with three proposals. Proposal 1 includes a first cost of 5,000 $ as well as an annual operating cost (AOC) of 1,00 $. The project is expected to run for 5 years, ending with a 400 $ worth at the end of its usage life. Proposal 2 is considered a permanant investment with an initial installment cost of 1,000 $ and a 300 $ refurbishment cost every 10 years. An unexpected cashflow, due to an internal accident, occured on the seventh year of the investment, resulting in a 100 $ expense. Finally, Proposal 3, which is a 10 year investment, consists of a 900$ first investment cost as well as an annual payment of 100 $ starting year 6.
Compare the three proposals (between each other) on the AW basis using a 10% MARR.
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