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Consider three alternatives below, each with a 5-year useful life. The MARR is 10 %. You must solve this problem using benefit-cost ratio analysis. Alternatives

Consider three alternatives below, each with a 5-year useful life. The MARR is 10 %. You must solve this problem using benefit-cost ratio analysis.

Alternatives

Alpha

Beta

Gamma

Cost

$600

$530

$200

Uniform Annual Benefit

$158.3

$138.7

$58.3

Answer (IRR of Alpha to two decimal places, e.g. 8.33%) ______________ .

Answer (IRR of Beta to two decimal places, e.g. 8.33%) _______________ .

Answer (IRR of Gamma to two decimal places, e.g. 8.33%) _____________

One of the above three alternative's IRRs will not meet the MARR.

Answer (incremental B-C ratio between the other two alternatives to 3 decimal places) ____________

Answer (which alternative should be selected and why) ____________________________________

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