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A large company has the opportunity to select one of seven projects-A, B, C, D, E, F, G-or choose the (do-nothing) alternative. Each project requires
A large company has the opportunity to select one of seven projects-A, B, C, D, E, F, G-or 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 Incremental IRR Initial investment Rate of return A B C D E F 10% A B 9% C D $10,000 $12,000 $13,000 $15,000 $17,000 $19,000 $25,000 9% 6% 12% 7% 5% 8% 13% 8% 9% 6% 5% 5% E F G 10% 5% 1% 2% 8% 6% 5% 3% 5% 7% 5% 7% 3% 10% If MARR is 6.5%, indicate which decision should be taken. Select project D Select project F Select project G Select project B None of the above
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