You have three contracts from which to choose. The first contract will require an outlay of 100,000 but will return 151,000 one year from now. The second contract requires an outlay of 200,000 and will return 305,000 one year from now. The third contract requres an outlay of 250,000 and will return 360,000 one year from now. Only one contract can be accepted. If your MARR is 20%, which one should you choose (Perform all calculations using 5 significant figures and round your answers to the nearest whole percent)?

What is the IRR on the increment from doing nothing to Option 1?

Do you accept contract 1 at this point ?

What is the IRR on the increment from Option 1 to Option 2?

Do you accept contract 2 at this point ?

What is the IRR on the increment from Option 2 to Option 3?

Do you accept contract 3 at this point ?