three mutually exclusive investment project alternatives are available. Relevant information regarding the projects is given in the table below. The companys MARR is 15 % perform the following analyses to help choose the best alternative.

Investment A B C Project Alternative _______________________________________ useful life(years ) | 6 | 8 | 12 ______________________________________ initial | | | investment | 100000|155000|240000 _______________________________________ Annual | | | Revenues | 45000 |54000 |66000 _________________________________________ Annual cost | 8000 | 11000 | 14000 _________________________________________

salvage value| 45000 |60000 | 180000 ______________________________________

a) Determine the IRR of each alternative using a suitable Excel function. Verify analytically ( i.e. by writing the correct expression for the PW of each project using appropriate equivalence factor formulas ) that the IRR you found is correct. b ) Calculate, using a sutable Excel functon and also analytically, the ERR of alternative and determine which ones are acceptable. Use an external funding / re-investment rate of = 8 %. c ) Assuming that the projects are repeatable, perform an AW analysis to determine the acceptable projects and the most profitable project. Fnd your result both analytically and by using suitable Excel functions. Compare your findings to those in Part ( a ). d ) Assuming that projects are not repeatable, perform a PW analysis based on a 8-year study period to determine the acceptable projects and the most profitable project. Here, you will need to calculate the imputed market value for project C, and use this appropriately to calculate this projects PW based on a 8-year co-terminated life. You are requred to do your calculations analytically ( but you can use certainly use Excel functions to verify them ). Compare your results here with those in Parts ( a ) and ( b ). e ) Calculate the simple payback period for each project . Based on your results, would you modify ( i.e, and any further information ) to your conclusions in Parts ( b ) and ( c ).

f ) Calculate the discounted payback period for each project. Based on your results, would you modify ( or, add any further information ) to your recommendation in Parts ( b ) and ( c ).