Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

D Question 10 0.06 pts Two mutually exclusive alternatives are being considered. Alternative A has an initial cost of $100 and uniform annual benefit of

image text in transcribed
image text in transcribed
D Question 10 0.06 pts Two mutually exclusive alternatives are being considered. Alternative A has an initial cost of $100 and uniform annual benefit of $19.93. The useful life is 10 years, and the IRR is 15% Alternative B has an initial cost of $50 and uniform annual benefit of $11.93. The useful life is 10 years, and the IRR is 20% The MARR is 8%. Which of the following equation(s) will solve for the IRR that allows you to make a correct decision based on Rate of Return Analysis? O PW(A) = -100 + 19.93(P/A. i", 10) PW(B) = -50+ 11.93(P/A, i. 10) O PWIA) = -100 + 19.93(P/A. 8%, 10) PW(B) = -50 + 11.93(P/A, 8%, 10) O PW = - 50 - 8(P/A, I, 10) O PW = 50 + 8(P/A, i, 10) O PW = - 50 + 8(P/A, P', 10) PW = 50 + 8(P/A, 8%, 10) O PWIA) = 100 - 19.93(P/A, i, 10) PW(B) = 50 - 11.93(P/A. i". 10) O PWIA) = 100 - 19.93(P/A, 8%, 10) PW(B) = 50 - 11.93(P/A. 8%, 10) Choose Alternative B, since the IRR is the largest. O Choose both Alternative A and B, since IRR is greater than the MARR

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting Information for Decision-Making and Strategy Execution

Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young

6th Edition

137024975, 978-0137024971

Students also viewed these Economics questions

Question

Show that V (X + Y) = V (X) + V (Y) + 2 Cov(X, Y).

Answered: 1 week ago