Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A 10 year study period has been specified, and the MARR is 17 % per year. Which site should be chosen based on the IRR criterion?

a) Which alternative would you choose as a base one? Choose the correct answer below.

A,B,C,D,E,F

b) Analyze the defrence between the base alternative and the second-choice alternative.

IRR(___-___)=___%

c) Analyze the difference between the current base alternative and the third-choice alternative.

IRR(___-___)=___%

d) Analyze the difference between the current base alternative and the fourth-choice alternative.

IRR(___-___)=___%

e) Analyze the difference between the current base alternative and the fifth-choice alternative.

IRR(___-___)=___%

f) Which alternative should be selected? Choose the correct answer below.

a,b,c,d,e,f

F B $150 D $400 E $500 $100 $260 $730 $15 $42.5 $55 $97.5 $117.5 $147.5 Investment cost (thousands) Annual revenue minus expense (thousands) IRR on total investment 15% 28.3% 21.2% 24.4% 23.5% 20.2%