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Each alternative in the table below possesses initial investments followed by uniform annual revenues for five (5) years. All alternatives will terminate at 5 years,
Each alternative in the table below possesses initial investments followed by uniform annual revenues for five (5) years. All alternatives will terminate at 5 years, where the last revenue will be received (i.e. in year 5). For the table below, consider a MARR of 12%. Incremental IRR Alternative Initial Investment IRR (1 B Y A a1 $25,000 13.5% B $30,000 17.6% 36.2% Y $40,000 x 18.0% 7.9% A $65,000 9.7% a r a. Select the best alternative using Incremental analysis. Give an explanation for your choice (5 Marks) b. Calculate the unknown IRR of alternative y (value X)? (15 Marks)
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