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You are considering an investment with two mutually-exclusive options. Option G costs $16.1 million and will give you $18 million back after the first year.
You are considering an investment with two mutually-exclusive options. Option G costs $16.1 million and will give you $18 million back after the first year. Option M costs $11.1 million and has a positive cash flow of $12.25 million after the first year. Your MARR is 18%. (a) In incremental analysis, the incremental cash flows should be obtained as (b) The Internal Rate of Return of the incremental investment is G plus M %. G minus M M minus G M minus G divided by MARR (M minus G) multiplied by MARR (c) should be chosen. NOTE: The incremental investment is a simple project / investment. /
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