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Business, 20.03.2020 19:13 amoore51

(10 Points) A company needs to make a choice between two options. Option 1 involves launching a new product line that will generate annual revenues of $165,000 over a fifty year period, requires an initial expense of $65,000 and annual maintenance and operating expenses of $6900. Option 2 involves providing services to the local city administration which will yield perpetual revenue of $16,000 following an initial expense of $65,000, and major repairs of $6,000 every 20 years. What option should the company pursue, based on the annual cash flow analysis method and assuming a MARR of 1%.

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