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can you please write down the formula on how to derive the i values highlighted in yellow. Im not sure how to calcukate them. Example
can you please write down the formula on how to derive the i values highlighted in yellow. Im not sure how to calcukate them.
Example - Incremental Rate of Return A company must purchase a new lathe. It is considering three lathes each with a life of 10 -years with no scrap value. Given MARR of 15% which alternative should be chosen' FindIRRLathe#1Lathe#2Lathe#3PW(benefits)=PW(costs)100000=25000(P/A,i,10)4=(P/A,i,10)i=21.4%(HigherthanMARR)Youonlydoyourcalculationsontheincrementalamounts(15000010000)=(3400025000)(P/A,i,10)50000/9000=(P/A,i,10)5.55=(P/A,i,10)i12.4%notanoption(200000100000)=(4600025000)(P/A,i,10)10000021000)(P/A,i,10)4.762(P/A,i,10)i16.4%V Step by Step Solution
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