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Business, 04.04.2020 10:48 c4thegoat

The Chem-Tex Chemical company is considering two additives for improving the dry-weather stability of its low-cost acrylic paint. Additive A will have a first cost of $110,000 and an annual operating cost of $60,000. Additive B will have a first cost of $175,000 and an annual operating cost of $35,000. If the company uses a three-year recovery period for paint products and a MARR of 20% per year, which process is favored on the basis of an incremental rate of return analysis?

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