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6. (40 Points) Incremental ROR Analysis for more than 2 ME Alternatives: Four alternatives (Alternatives A, B, C, and D) described below are being
6. (40 Points) Incremental ROR Analysis for more than 2 ME Alternatives: Four alternatives (Alternatives A, B, C, and D) described below are being evaluated. Initial Investment, Overall Rate of Incremental Rate of Return, %, When Compared with Alternative A B C Alternative Return, % ABCD - 30,000 16.9 - 71,000 15 44 - 95,000 17.5 18.7 16.7 D -110,000 10 19.2 15 10 a) (20 points) If the alternatives are independent, which one(s) should be selected at a MARR of 15% per year? There is no budget limit. b) (20 points) If the alternatives are mutually exclusive (ME), which one should be selected at a MARR of 17% per year? {Hint: Consider Do Nothing (DN)}
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