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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

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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 $190,000 and its cash flows exhibit an annual rate of return of i'x = 20%. The second, alternative Y, requires an initial investment of $130,000 and its cash flows have an annual rate of return of P'Y = 25% 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 rX? (b) What is the expected PX-Y? The rate of return on the increment is less than 20% per year. The expected lx-Y is %

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