Question: 5 (25 points) The following two alternatives are given. Data First Cost Annual Cost Annual Benefit Life, Years Salvage Value A 35,600 $800 Is2.100 7

5 (25 points) The following two alternatives are given. Data First Cost Annual Cost Annual Benefit Life, Years Salvage Value A 35,600 $800 Is2.100 7 $8,200 81,000 $2.700 7 $2,800 S1.000 Assume that MARR is 10%. Use the incremental rate of return analysis to determine which alternative (A or B) one should choose. (Hint: Find AIRR) (a) (5 pts) Compute the incremental cash flow A TLA 1002 100 (b) (15 pts) Find the AIRR or a range of AIRR 0 0LO Should you choose Alternative A or B, and why? (c) (5pts)

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