Assume alternatives A and B are being evaluated by the rate of return method against a MARR

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Assume alternatives A and B are being evaluated by the rate of return method against a MARR of 15% per year. Alternative B requires a higher initial investment than A and the i* values are i *A = 20% and i *B = 16% per year. Under what circumstance is alternative B the preferred choice?

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...
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Engineering Economy

ISBN: 978-0073523439

8th edition

Authors: Leland T. Blank, Anthony Tarquin

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