Question: Can someone check my work Wal Exam Problem 2 (30 points). Use incremental analysis to compare the two project options shown below. The number of

Can someone check my work Wal Exam Problem 2 (30 points). UseCan someone check my work

Wal Exam Problem 2 (30 points). Use incremental analysis to compare the two project options shown below. The number of periods is 6 and the MARR is 6 % a. Option A Option B A Initial Cost $315,000 $380,000 -65.000 Annual Benefit $75,000 $85,000 10,ooo Repair Cost at n = 3 $50,000 $30,000 120,000 Use NPW analysis to determine the internal rate of return for the incremental cash flow (15 points). i. Calculate the incremental cash flow and show your results in the column provided above. ii. Write an equation for NPW for the delta column. Solve for NPW of the delta column using a variety of interest rates. Tabulate your results. Continue solving for NPW until you find the two particular interest rates (using the interest tables in the back of your textbook) where one interest rate yields a negative NPW and the interest rate on the next page yields a positive NPW. iv. Based on the results from part iii, state the range of interest rates for AIRR. For example, x% 22, los 18% 2498 .3704 65,ood = 4,963 Option A is the the better option because AIRR is less then MARR 10). 4.355 Wal Exam Problem 2 (30 points). Use incremental analysis to compare the two project options shown below. The number of periods is 6 and the MARR is 6 % a. Option A Option B A Initial Cost $315,000 $380,000 -65.000 Annual Benefit $75,000 $85,000 10,ooo Repair Cost at n = 3 $50,000 $30,000 120,000 Use NPW analysis to determine the internal rate of return for the incremental cash flow (15 points). i. Calculate the incremental cash flow and show your results in the column provided above. ii. Write an equation for NPW for the delta column. Solve for NPW of the delta column using a variety of interest rates. Tabulate your results. Continue solving for NPW until you find the two particular interest rates (using the interest tables in the back of your textbook) where one interest rate yields a negative NPW and the interest rate on the next page yields a positive NPW. iv. Based on the results from part iii, state the range of interest rates for AIRR. For example, x% 22, los 18% 2498 .3704 65,ood = 4,963 Option A is the the better option because AIRR is less then MARR 10). 4.355

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