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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

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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 (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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