8-37: A firm must decide which of 3 alternatives to adopt to expand its capacity. The firm wishes a minimum annual profit of 20% of the initial cost of each separable increment of investment. Any money not invested in capacity expansion can be invested elsewhere for an annual yield of 20% of initial cost. Your reasoning must include the IRR for each Challenger-Defender comparison.

Alternative	Initial Cost	Annual Profit	Profit Rate
A	$100,000	$30,000	30%
B	$300,000	$66,000	22%
C	$500,000	$80,000	16%

Which alternative should be selected? Use a challenger-defender rate of return analysis.

I need the steps broken out in detail.