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A large company has the opportunity to select one of seven projectsA, B, C, D, E, F, Gor choose the (do-nothing) alternative. Each project requires

A large company has the opportunity to select one of seven projectsA, B, C, D, E, F, Gor choose the (do-nothing) alternative. Each project requires a single initial investment as shown in the table below. Information on each alternative was fed into a computer program that calculated the IRR for each project and all the pertinent incremental IRRs as shown in the table below.

Project

Initial investment

Rate of return

Incremental IRR

A

B

C

D

E

F

A

$10,000

10%

B

$12,000

9%

7%

C

$13,000

8%

2%

1%

D

$15,000

7%

9%

5%

9%

E

$17,000

6%

5%

1%

6%

3%

F

$19,000

5%

8%

2%

5%

5%

5%

G

$25,000

7%

3%

8%

7%

7%

3%

10%

If MARR is 6.5%, indicate which decision should be taken.

Select project D

Select project A

Select project E

Select project G

None of the above

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