Question
1. A rate of return analysis was initiated for the infinite-life alternatives below. (a) Fill in the blanks in the incremental rate of return column
1. A rate of return analysis was initiated for the infinite-life alternatives below.
(a) Fill in the blanks in the incremental rate of return column on the incremental cash flow portion of the table.
(b) How much revenue is associated with each alternative?
(c) What alternative should be selected if they are mutually exclusive and the MARR is 16%?
(d) What alternative should be selected if they are mutually exclusive and the MARR is 11%?
(e) Select the two best alternatives at a MARR of 19%
Alternatuve | Alternative's Investment, $ | Alternative's Rate of Return, % |
E | -10,000 | 20 |
F | -25,000 | 35 |
G | -50,000 | 25 |
H | -80,000 | 20 |
Incremental Rate of Return, %, on Incremental Cash Flow When Compared with Alternative
Alternative | E | F | G | H |
E | - | - | - | - |
F | - | - | - | - |
G | - | - | - | 11.7 |
H | - | - | 11.7 | - |
I need a calculation and explanation for this question
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