Question
Would love some help on understanding the best way to approach this... Thanks!!! The cash flows for three different alternatives are given in table below.
Would love some help on understanding the best way to approach this... Thanks!!!
The cash flows for three different alternatives are given in table below. MARR =10%.
Alt. A Alt. B Alt. C
Initial cost $5,000 9,000 7,500
Annual benefits $1,457 2,518 2,133
RoR 14% 13% 12.4%
Life in years 5
1. RoR for the first increment (Alt. C-Alt. A) is ___________________.
A. 10.12% B. 9.38% C. 11.85% D. 11.00%
2. RoR for the second increment is ___________________.
A. 10.12% B. 9.38% C. 8.94% D. 9.87%
3. The best alternative for a MARR of 10% using the incremental rate of return analysis is ____________.
A. Alt. C B. Alt. A C. Alt. B D. Do-nothing
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