1. Given the costs and efits of two water pumps, what is the rate of return on the difference of these alternatives? two water ear $3000 +800 +800 +800 +800 +800 $3800 +1200 +1200 +1200 +1200 +1200 0 4 What is your choice of these 2 alternatives and why? 2 The manager of a local restaurant is trying to decide whether to buy a charcoal broiling unit or an electric grill for cooking hamburgers. A market study shows customers prefer charcoal broiling but the unit is more expensive. The manager's Minimum Attractive Rate of Return (MARR) is 20%. The manager estimates the cost and net benefits from the two alternatives as follows End of Year Broiler $2200 Grill $1450 +710 Find the rate of return of broiler and grill, need exact values. And use incremental rate of return analysis to determinate which altermative the manager should choose 3. General Motors makes a "P-Car" automobile model. The standard P-Card is sold as a Chevy while a modified more luxurious" P-Car is sold as a Buick. Although the two cars are essentially the same, the Buick costs $15,000 while the Chevy costs $13,000. A friend of yours claims that the Buick is a better buy than the Chevy since the Buick has a higher resale value. The Buick may be sold after 4 years for $7500 while the Chevy can be sold for $5000 (a) Calculate the incremental rate of return. Express your final answer as XXXXX% (b) For what range of values of the Minimum Attractive Rate of Return (MARR), if any is the Buick preferred? (c) For what range of values of MARR, if any, is the Chevy preferred? (Ignore the "benefit ,cost' of owning/operating a more luxurious car.)