Youngblood Molding is examining 5 alternatives for a piece of material handling equipment. Each has an expected life of 10 years with no salvage value, and Youngbloods MARR is 16%. Using an incremental analysis, which material handling alternative should be chosen (Justify your answer)? The table below includes initial investment, net annual income, and IRR for each alternative.

	Alternative
	1	2	3	4	5
Capital investment	($16,250)	($12,000)	($20,000)	($14,400)	($12,500)
Net annual income	$3,620	$2,500	$4,400	$3,050	$2,520