chneeberger, Inc. is considering investing in one of two alternatives for increasing the acceleration of its linear motor actuators. The first, alternative X, requires an initial investment of $185,000 and its cash flows exhibit an annual rate of return of i*x = 19%. The second, alternative Y, requires an initial investment of $125,000 and its cash flows have an annual rate of return ofi*Y = 24%. Schneeberger's MARR is 20% per year. Answer the following questions; (a) Will the rate of return on the incremental investment in X be larger or smaller thani*X? (b) What is the expectedi*X-Y?

The rate of return on the increment isless than

Correct

19% per year.

The expectedi*_X-Yis%.