A firm must decide which one of the three alternatives below it should select 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 (forever) 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	$280,000	$72,000	25.7%
C	$400,000	$90,000	22.5%

In the table below, list the challengers and defenders and the IRR between them and which one is the winner. I have given the first Challenger and Defender (A Do Nothing). <10 pts>

Challenger	Defender	IRR	Winner
A	Do Nothing

This cell indicates alternative selected

Answers: Place in above table. <10 pts>

Reasoning/Work: