14. The incremental B/C ratio (second decimal; no rounding) between the Alpha and Beta tractors is a) 0.95; b) 1.07; c) 1.12; d) 1.16. 15. The incremental B/C ratio (second decimal; no rounding) between the Beta and Gamma tractors is a) 0.67; b) 0.94; c) 1.02; d) 1.15. 18. The incremental Internal Rate of Return (IRR) between the Alpha and Gamma tractors (second decimal; no rounding) isa) 10.29%; b) 10.52%; c) 11.47%; d) 12.23%. 20. Gammas External Rate of Return (ERR) (second decimal; no rounding) is a) 8.67%; b) 9.67%; c) 10.45%; d) 11.44%. 21. The incremental External Rate of Return (ERR) between the Alpha and Gamma tractors (second decimal; no rounding) is a) 10.43%; b) 10.85%; c) 11.49%; d) 12.18%. 22. The incremental External Rate of Return (ERR) between the Beta and Gamma tractors (second decimal; no rounding) is a) 9.55%; b) 9.85%; c) 10.17%; d) 11.75%. A cash crop farmer is considering the replacement of one of its aging tractors. The key parameters of the three tractors under scrutiny are provided below.
Parameters	Alpha	Beta	Gamma
1. InitialCost ($)	300,000	340,000	390,000
2. Revenues ($)	240,000 at EOY1 decreasing by 2% annually thereafter	250,000 at EOY1 increasing by 2,000 annually thereafter	294,500 annually
3. Operating costs ($)	130,000 at EOY1 increasing by 1,000 annually thereafter	193,000 at EOY1 decreasing by 2% annually thereafter	EOY1-EOY8 = 190,000; EOY9-EOY16 = 200,000
4. End-of-life salvage value ($)	5,000	7,000	-15,000
5. Usefullife (years)	4	8	16
EOY = End-of-year Industry Standard = 4.5 years MARR = 10%