Question 12: Jewel-Osco evaluated three different pay-by-touch systems that identify customers by a finger scan and then deduct the amount of the bill directly from their checking accounts. The alternatives were ranked according to increasing initial investment cost and identified as Alternatives A, B, and C. Based on the incremental rates of return shown and the company's MARR of 16% per year, the alternative that should be selected is Comparison A-to-DN Rate of Return, % 23.4 B-to-DN 8.1 C-to-DN 16.6 A-to-B -5.1 A-to-C 12.0 B-to-C 83.9 Alternate A Question 13: For the cash flows shown, the correct equation to determine the composite rate of return for a reinvestment rate of 12% per year is 10,000(1+i)](1+ i')} + 8000 10,000(1+ i')](1+ i')} + 8000 {[5000(1+0.12) - 10,000](1+i')} + 8000 {[5000(1+ i') - 10,000] (1+ i')} + 8000 a. 0 b. 0 {[5000 {[5000 c. 0 d. 0 = Year 0 1 2 Cash Flow, $ 5,000 -10,000 8,000 Answer is (c) Question 14: For the cash flows shown, the correct equation for F2 at the reinvestment rate of 20% per year is Year Cash Flow, $ 10,000 0 1 6,000 2 -8,000 3 -19,000 4 4,000 a. [10,000(1+i) + 6000] (1.20) - 8000 b. [10,000(1.20) + 6000(1+ i')](1.20) - 8000 c. [10,000(1.20) + 6000] (1.20) 8000 d. [10,000(1.20) + 6000] (1+i) - 8000 Answer is (c)