Question
Use incremental analysis to evaluate the 2 alternatives. Assume an eight year life and a MARR of 10%. Would picking the investment with highest IRR
Use incremental analysis to evaluate the 2 alternatives. Assume an eight year life and a MARR of 10%. Would picking the investment with highest IRR give you the best investment decision?
x Alt A Alt B
Initial investment $10,000 $6,800
O&M costs $1,250 $600
Annual benefit $3,000 $2,000
Salvage value $3,000 $0
IRR 11.8% $12.6%
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Microeconomics
Authors: Roger A. Arnold
12th Edition
1285738306, 978-1285738307
