Determine which alternative should be selected using a rate of return analysis

method if the MARR is 7%. The alternatives are not replaced at the end of their

useful lives. (Be sure to perform the incremental analysis)

Alternative

Initial Cost: 18,000

Casb Flow

Useful Life in Xears

Annual Benefits: 2,950 at the end of the first year and increases by 400 there after

Initial Cost: 22,000 Annual Benefits: 1000 at the end of the first year and increases by 700 there after

B Initial Cost: 25,70012

C Annual Benefits: 1000 at the end of the first year and increases by 500 there after

Answer rating: 100% (QA)

SOLUTION To determine which alternative should be selected using a rate of return analysis we need to calculate the rate of return for each alternative and compare them to the minimum acceptable rate ... View the full answer