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For two mutually exclusive machines, which machine will you select if the MARR is 12% based on the concept of IRR? Years CF for Machine
For two mutually exclusive machines, which machine will you select if the MARR is 12% based on the concept of IRR?
Years | CF for Machine A | CF for Machine B |
0 | $ (120,000) | $ (148,000) |
1 | $ 32,000 | $ 46,000 |
2 | $ 35,000 | $ 49,000 |
3 | $ 38,000 | $ 52,000 |
4 | $ 41,000 | $ 52,000 |
5 | $ 44,000 | $ (52,000) |
6 | $ (24,000) | $ 55,000 |
7 | $ 47,000 | $ 55,000 |
8 | $ (21,000) | $ (21,000) |
Machine A | ||
Machine B | ||
Both need to be rejected. | ||
Both are equally good. |
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