You are given the cash flow series for two projects,

Alt. A and Alt. B.

YEAR 0 1 2 3 4 5 6

Alt. A - F1 X X X X X X + S1

Alt. B - F2 Y Y Y Y Y Y + S2

Assume that F2 > F1, and X, Y, S1, and S2 are positive; the incremental rate of return (i*) on the additional investment in Alt. B can be calculated with the following expression: choose one (please tell me why! Thank you!)

0 = - F2 + Y (P/A, i*, 6) + S2(P/F, i*, 6)

0 = - (F2 - F1) + (Y - X)(P/A, i*, 5) + (S2 - S1)(P/F, i*, 6)

0 = - (F2 - F1)(F/P, i*, 6) + (Y - X)(F/A, i*, 6) + (S2 - S1)

0 = - (F2 - F1) + (Y - X) + (Y + S2) - (X + S1)

0 = (F1 - F2)(F/P, i*, 6) + (X - Y)(F/A, i*, 6) + (S2 - S1)

0 = - F1 + X(P/A, i*, 6) + S1(P/F, i*, 6)

0 = - F2 + Y(P/A, i*, 6) + S2(P/F, i*, 6)

0 = - F1 + X(P/A, i*, 5) + S1(P/F, i*, 6)

0 = - F2 + Y(P/A, i*, 5) + S2(P/F, i*, 6)