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17. ALPHA'S Internal Rate of Return (IRR) is between 18. BETA's Internal Rate of Return (IRR) is between 19. The incremental Internal Rate of Return
17. ALPHA'S Internal Rate of Return (IRR) is between 18. BETA's Internal Rate of Return (IRR) is between 19. The incremental Internal Rate of Return (AIRR) between BETA and GAMMA is between A lumber company is planning the purchase of a small warehouse. The key parameters of the three warehouses under scrutiny are provided below. Parameters ALPHA BETA GAMMA 1. Initial Cost ($3) $250,000 $325,000 $375,000 $260,000 at EOY1 increasing by $3,000 annually thereafter $155.00" fit 50\" $190,000 at EOY1 decreasmg by 3. Operating Costs $125,000 annually $1 000 annually decreasing by 1% $230,000 at EOY1 increasing by 2% 2. Revenues (5) annually thereafter $290,000 at EOY1 increasing by 1% annually thereafter (5) thereafter annually thereafter 4' E"d'f""e \"wage $100 000 $130 000 $90 000 value ($) ' ' ' 5. Useful life (years) 3 years 4 years 6 years o All parameter values are fictitious. o EOY = End-of-year o The industry standard for these mixers is 2 years 0 MARR = 10%
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