7. 6.33 As project manager, you received from the purchasing department a listing of estimated annual cash flow differences between two electrode setups you want to install. The MARR is 12% per year and alternative Dryloc requires the larger initial investment compared to NPT. Only one can be selected.

1. Determine which should be selected using an AW-based ROR analysis.

2. Use a graph of the incremental values to determine the largest MARR value that justifies the NPT alternative.

Table Summary: Table divided into 2 columns with the first column showing the Year and the second column showing Incremental Cash Flow, Dryloc – NPT, in dollars.

Year Incremental Cash Flow (Dryloc – NPT), $

0 –56,000 1–8 8,900 9 12,000