QUESTION 3 Six mutually exclusive projects A, B, C, D, E, and F, are being considered by XYZ. They have been ordered by first costs so that project A has the lowest first cost, project F the largest. Specifically, detailed cash flows for Projects A and B are given below. Project A: Initial Cost of $359,545. annual benefit of $50,000 for 15 years Project B: Initial Cost of $503,363. annual benefit of $70,000 for 15 years Also, the table below apply to all projects (A through F). The data can be interpreted as follows: the IRR on the incremental investment from project C to Dis 13%. IRR on IRR on Increments of Investment Project overall Investment Compared With Project B D A ? B 11% ? C 11% 9% 11% D 13% 11% 15% 13% E 19% 16% 16% 14% 9% F 15% 10.5% 14% 13% 6% 9.50% First, calculate both the IRR for Project A and the Increment IRR from Project A to Project B Next, Use the table to decide which project should be selected. MARR for XYZ is set at 10% IRR(Project A)=9% IRR(Project A) = 11% IRR(Project A) = 12% IRR(Project A) = 13% DIRR(Increament A to B) = 8% DIRR(Increament A to B)=9% DIRR(Increament A to B) = 10% IRR(Increament A to B) = 11% Final Selection la Proect B Final Selection le Project C Final Selection la Project D Final Selection la Project F