Five independent projects were ranked in decreasing order by two measuresrate of return (ROR) and present worth
Question:
(a) Use the results below to determine the opportunity cost in ROR terms for each measure.
(b) If a MARR of 15% per year is a firm requirement, how does the opportunity cost help in selecting projects to fund?
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other... Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
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a ROR measure Select projects A E and C to total 21 million Opportun...View the full answer
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