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6. Calculate incremental cash flow for the more expensive project. N (Time Period) Alternative X Cash Flow Alternative Y Cash Flow Incremental Cash Flow 0

6. Calculate incremental cash flow for the more expensive project. N (Time Period) Alternative X Cash Flow Alternative Y Cash Flow Incremental Cash Flow 0 -$100,000 -$125,000 1 25,000 30,000 2 25,000 32,000 3 30,000 35,000 4 30,000 38,000 Suggest a situation where one would need to use the incremental cash flows to evaluate the alternatives. 7. Mutually exclusive projects, A, B, C, D, and E are ordered from least to greatest capital cost (i.e., capital cost of A < B < C < D < E). Determine which alternative should be selected from the following table of IRRs and incremental IRRs if the MARR equals 10 percent. Explain how you arrived at this selection.

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