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For the following table, assume a minimum attractive rate of return of 10% per year and a useful life for each alternative of six years

For the following table, assume a minimum attractive rate of return of 10% per year and a useful life for each alternative of six years that equals the study period. The rank order of alternatives from least capital investment to greatest capital investment is Do Nothing A C B.

Do Nothing vs. A

A vs. C

C vs. B

Capital Investment

-$15,000

-$2,000

-$3,000

Annual revenues

4,000

900

460

Annual costs

-1,000

-150

100

Market value

6,000

-2,220

3,350

ROR

12.7%

???

???

  1. Select the best alternative based on incremental rate of return analysis.

Show your analysis. ( it is very important to be detailed and to show your analysis)

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