Question
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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