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PROBLEM 2 Table 1 shows the initial investment and the overall rate of return of four alternatives. It also provides the incremental rate of return
PROBLEM 2 Table 1 shows the initial investment and the overall rate of return of four alternatives. It also provides the incremental rate of return (Ai*) for each pair of alternatives. If the alternatives are mutually exclusive, which alternative should be selected if the minimum attractive rate of return (MARR) value is 14.5%? Use an incremental rate of return analysis method. Table 1 Initial Overall ROR, Incremental ROR, Ai*% When Compared with Alternative A TB Alternative Investment, $ i% -60,000 11.7 22.2 43.3 -90,000 -140,000 17.9 22.5 10.0 -190,000 15.8 17.8 10.0 10.0
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