Question
Consider the following two mutually exclusive investment alternatives with given (MARR= 10%) Year Project A1 Project A2 0 -15,000 $ -20,000 $ 1 7,500 $
Consider the following two mutually exclusive investment alternatives with given (MARR= 10%)
| Year | Project A1 | Project A2 |
| 0 | -15,000 $ | -20,000 $ |
| 1 | 7,500 $ | 8,000 $ |
| 2 | 7,500 $ | 15,000 $ |
| 3 | 7,500 $ | 5,000 $ |
| i* | 23.5 % | 20 % |
a) Find the best alternative of A1 and A2 based on the present worth incremental investment.
b) Find the best alternative of A1 and A2 based on the IRR incremental investment.
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M Finance
Authors: Marcia Cornett, Troy Adair, John Nofsinger
3rd Edition
0077861779, 978-0077861773
