Schneeberger, Inc. is considering investing in one of two alternatives for increasing the acceleration of its linear motor actuators. The first, alternative X, requires an initial investment of $160,000 and its cash flows exhibit an annual rate of return of i*x = 24%. The second, alternative Y, requires an initial investment of $145,000 and its cash flows have an annual rate of return of i*Y = 16%. Schneeberger's MARR is 20% per year. Answer the following questions; (a) Will the rate of return on the incremental investment in X be larger or smaller than i*X? (b) What is the expected i*X-Y?

The rate of return on the increment is greater than 24% per year.

The expected i*_X-Y is ???