Consider six mutually exclusive and indivisible investment alternatives that will fully refund the initial investment to BASF in their catalyst unit at the end of 3 years. The annual returns are as shown below, and a MARR of 12 percent is used.

a. Which alternative should be selected by BASF? Use the IRR method to determine the preferred alternative.

b. Use Excel \(\mathbb{1}\) and SOLVER to select the preferred investment based on PW. State both the PW and IRR.

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Alternative 1 2 3 4 5 6 Initial Investment $40,000 $80,000 $60,000 $100,000 $150,000 $120,000 Annual Return $5,200 $10,050 $7,500 $13,550 $18,700 $15,700