ZeeZee's Construction Company has the opportunity to select one of four projects (A, B, C, or D) or choose the null (do-nothing) alternative. Each project requires a single initial investment and has an internal rate of return as shown in the first table below. The second table shows the incremental IRRs for pairwise comparisons between each project and all other projects with a smaller initial investment.

For each of the values of MARR below, indicate which project is preferred based on an incremental IRR analysis.

a. \(M A R R=50\) percent

b. \(M A R R=41\) percent

c. \(M A R R=25\) percent

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Investments and IRRS Project Null A Initial Investment IRR $0 0.0% $600,000 44% B $800,000 40% C $470,000 39.2% D $540,000 36% Incremental IRRS Increment Incremental IRR B-A 28.3% B-D 48.8% B-C 41.4% A-D 116.5% A-C 61% D-C 18.4%