Also need the PW for the other values!! The Ford Motor Company is considering th

Question

Also need the PW for the other values!!

The Ford Motor Company is considering three mutually exclusive electronic stability control systems for protection against rollover of its automobiles. The investment period is four years (equal lives), and the MARR is 11% per year. Data for fixturing costs of the systems are given on the right. The alternatives all have a MACRS (GDS) property class of three years. If the effective income tax rate is 38% and the after tax MARR = (1 - 0.38) (11%) = 6.82% per year, which alternative should be recommended? Calculate the PW value for the alternative A. PW_A(6.82%) = (Round to the nearest dollar.)

Explanation / Answer

Yr DF @ 6.82% Alternative A Alternative B Alternative C CF DCF CF DCF CF DCF 0 1.00 -11700      (11,700.00) -15100      (15,100.00) -7400 (7,400.00) 1 0.48 2666           1,289.04 3162           1,528.87 1798         869.35 2 0.23 2666               623.27 3162              739.23 1798         420.34 3 0.11 2666               301.36 3162              357.42 1798         203.24 4 0.05 2666               145.71 3162              172.82 1798           98.27 4 0.05 2300               125.71 3600              196.76 1500           81.98 PW         (9,214.91)      (12,104.91) (5,726.81)

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