Question
The following table presents an incremental analysis that has not been completed, assume that the MARR is 10% per year and that the useful life
The following table presents an incremental analysis that has not been completed, assume that the MARR is 10% per year and that the useful life for each alternative is 6 years, equal to the study period. To evaluate the alternatives, they have been arranged in ascending order with respect to the initial investment: Do nothing A C B. According to the following table, select the best answer.
In your calculation sheet you must show how you calculated the value of the ROR missing from the table to obtain credit
INCREMENTAL
A Do nothing (C A) (B C) CAPITAL INVESTMENT - $ 15,000 - $ 2000 - $ 3,000 ANNUAL INCOME 4,000 900 460 ANNUAL COSTS -1,000 -150 100 RESIDUAL VALUE 6,000 -2,220 3,350 ROR 12.7% 10.9% ????
Select one: a. Do nothing b. Alt. C c. High d. Alt. B
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