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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% | ??? | ??? |
- 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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