Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 30

Specialty Gases Chemicals manufactures nitrogen trifluoride, a highly specialized gas used as an industrial cleansing agent for flat panels installed in laptop computers, televisions, and desktop monitors. The incremental cash flow associated with two alternatives for chemical storage and handling systems (identified as P3 and X3) has been calculated in $1000 units. Determine (a) the rate of return on the incremental cash flows and (b) which one should be selected if the company's MARR is 25% per year. Alternative X3 requires the larger initial investment.