Use incremental challenger-defender analysis to determine the best of the 3 mutually exclusive alternatives. Assume MARR...

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Use incremental challenger-defender analysis to determine the best of the 3 mutually exclusive alternatives. Assume MARR of 7% and a 5 year life. Initial Investment O&M Costs Annual Benefit Salvage Value Alt A $5,000 $200 $1,200 $1,300 First order lowest initial investment to highest initial investment: Alt B Initial Investment $3,000 O&M Costs Annual Benefit Salvage Value $400 $1,000 $700 Alt B $3,000 $400 $1,000 Alt C $4,000 $400 $1,200 $700 $1,200 Alt C $4,000 $400 Alt A $5,000 $200 $1,200 $1,200 $1,200 $1,300 Check to see if IRR of A is> MARR NPVA = -10,000+ 2200*(P/A, i, 6) + 3000*(P/F, i, 6) Using MARR of 10% for i. NPVA = -10,000+ 2,200*()+3,000(.....) = 1,274 Since NPV is positive, IRR > MARR. A is the............ |NPVC-A = -2,000 + 300(P/A, i, 6) + 2000(P/F, i, 6) Using MARR of 10% for i. NPVC-A-2000 + 300(...) + 2000(.....) =.………..... Since NPV is positive, IRR > MARR. C is the new Use incremental challenger-defender analysis to determine the best of the 3 mutually exclusive alternatives. Assume MARR of 7% and a 5 year life. Initial Investment O&M Costs Annual Benefit Salvage Value Alt A $5,000 $200 $1,200 $1,300 First order lowest initial investment to highest initial investment: Alt B Initial Investment $3,000 O&M Costs Annual Benefit Salvage Value $400 $1,000 $700 Alt B $3,000 $400 $1,000 Alt C $4,000 $400 $1,200 $700 $1,200 Alt C $4,000 $400 Alt A $5,000 $200 $1,200 $1,200 $1,200 $1,300 Check to see if IRR of A is> MARR NPVA = -10,000+ 2200*(P/A, i, 6) + 3000*(P/F, i, 6) Using MARR of 10% for i. NPVA = -10,000+ 2,200*()+3,000(.....) = 1,274 Since NPV is positive, IRR > MARR. A is the............ |NPVC-A = -2,000 + 300(P/A, i, 6) + 2000(P/F, i, 6) Using MARR of 10% for i. NPVC-A-2000 + 300(...) + 2000(.....) =.………..... Since NPV is positive, IRR > MARR. C is the new

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Here are the stepbystep calculations 1 Check IRR of Alternative A Cash Flows for A Initial Investmen... View the full answer