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Consider the following three alternatives with their cash flow tables. MARR=10% EOY Alternative 1 Alternative 2 Alternative 3 0 -20.000 -10.000 -30.000 1 4.000 1.800
Consider the following three alternatives with their cash flow tables. MARR=10% EOY Alternative 1 Alternative 2 Alternative 3 0 -20.000 -10.000 -30.000 1 4.000 1.800 6.300 2 6.000 1.800 8.300 3 5.000 1.800 7.300 4 3.500 1.800 5.800 5 5.000 1.800 7.300 6 4.000 1.800 6.300 7 8.000 1.800 10.300 8 4.000 1.800 6.300 Individual IRR 17.67% 8.90% 17.12% Individual ERR when 10.76% 6.53% 10.46% =4% Determine the best alternative by the incremental ERR method if the external rate = 4%
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