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In the Rawhide Company (a leather products distributor), decisions regarding approval of proposals for capital investment are based upon a stipulated MARR of 13% method

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In the Rawhide Company (a leather products distributor), decisions regarding approval of proposals for capital investment are based upon a stipulated MARR of 13% method to determine the most economical equipment per year. The five packaging equipment listed in the table below were compared, assuming a 9-year life and zero market value for each at that time. Use the IRR Packaging Equipment w Y Z Capital investment $38,300 $50,400 $59,000 $67,500 $83.400 Annual revenues less expenses 11,100 13,700 15.700 17,400 20,300 Internal rate of rotum (IRR) 25.1% 22.9% 22.2% 21.2% 19.4% V To perform the incremental analysis, which alternative would you choose as the initial base alternativo ? Choose the correct answer below OAZ , . OCX OD W OE V Perform the IRR incremental analysis Horation 1: Analyze the Incremental cash flown between the base alternative and the next higher ranked alternative, Base alternative: Higher ranked alternative: The incremental rote-of-return, AIRR - % (Round to one decimal place) Soloct Alternative Iteration 2. Analyze the incremental cash flows between the current base alternative and the next higher ranked alternative. Base alternative: Higher ranked alternative The Incremental rate-of-retum, AIRR = %. (Round to one decimal place.) Select Alternative Iteration 3: Analyze the Incremental cash flows between the current base alternative and the next higher ranked alternative. Base alternative: Higher ranked alternative: The Incremental rate-of-return, AIRR-% (Round to one docimal place) Select Alternative Iteration Analyze the incremental cash flows between the current base alternative and the next higher ranked alternative Base alternative: Higher ranked alternative: Iteration 3: Analyze the incremental cash flows between the current base alternative and the next higher ranked alternative.. Base alternative: Higher ranked alternative: The incremental rate-of-return, AIRR=% (Round to one decimal place.) Select Alternative Iteration 4: Analyze the incremental cash flows between the current base alternative and the next higher ranked alternativo. Base alternative: Higher ranked alternative The incremental rate-of-return, AIRR-% (Round to one decimal place) Select Alterativo Therefore, Alternative should be selected as the most economical

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