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A firm is considering two mutually exclusive alternatives as part of an upgrade to its supply chain management system. The cash flow information is presented
A firm is considering two mutually exclusive alternatives as part of an upgrade to its supply chain management system. The cash flow information is presented in the table below. Based on a 20-year study period and 10% MARR, use the incrementa ERR method to determine which aterative ste most economical 80000 100000 Installation cost Net annual revenue 2500 15000 Salvage value Useful life Calculated IRR 0 20 years 14.6% 20 years 13.9% 1) Which alternative should be used as the base scenario for the calculation? 2) What is the incremental ERR of the delta cash flow? 15.4) Please keep one decimal place and only enter the numbers eg if your answer is 15.37%, please enter 3) Which alternative should be selected
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