Question
1.Compare the following two alternatives by the IRR method, given MARR of 7%/year. Is the incement in cost form A to B justified? Alt. Construction
1.Compare the following two alternatives by the IRR method, given MARR of 7%/year. Is the incement in cost form A to B justified?
| Alt. | Construction cost $ | Benefits $/yr | Salvage $ | Service Life (yrs) |
| A | 110,000 | 65,000 | 10,000 | 7 |
| B | 275,000 | 75,000 | 25,000 | 7 |
Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the incement in cost form A to B justified?
| Alt. | Construction cost $ | Benefits $/yr | Salvage $ | Service Life (yrs) |
| A | 510,000 | 145,000 | 10,000 | 7 |
| B | 775,000 | 155,000 | 20,000 | 9 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Get Rich With Dividends
Authors: Marc Lichtenfeld
3rd Edition
1119985552, 978-1119985556
