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(%) Problem 6-15 (algorithmic) Ques You are the President of AMT Enterprises. You have the opportunity to expand your product line to include a new
(%) Problem 6-15 (algorithmic) Ques You are the President of AMT Enterprises. You have the opportunity to expand your product line to include a new semi-conductor wafer fabrication line. I produce the new wafer, you must invest in a new production process. In addition to doing nothing (DN), two mutually exclusive processes are currently a produce the wafer. Should you produce this new wafer? In other words,_which, if either, of the alternative processes should be chosen? Note: IRR for Alte I = 18.8%, and IRR for Alternative I-21.4%. Assume that the capital investment for each alternative occurs at year 0 and that the annual revenues and e occur at the end of year 1. Use the incremental IRR method to justify your decision. Your company's MARR is 14% aeseverus ar Click the icon to view the alternatives description Which alternative would you choose as a base one? Choose the correct answer below OA. Alternative ll B. Alternative l C. Do nothing Analyze the difference between the base alternative and the second-choice alternative IRR (1 -DN ): 18.8 %. (Round to one decimal place.) Analyze the difference between the current base alternative and the third-choice alternative IRRAD-D-D% (Round to ore decimal places.) (111 | |)-| %. (Round to one decimal places.) 1 More Info Capital Investment Annual Revenues Annual Expenses $24,000 $8,000 $2,500 $31,000 $11,500 $3,000 in year one, increasing $250 each year thereafter 10 Useful life 10
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