Consider the following two mutually exclusive projects being considered by an agency. The agency's MARR is $4\%$ per year and the projects have a service life of $5$ years.

Answer the following questions.

a$.$ Based on the PW$,$ the project that is more economical is Project $($Enter the project number$).$

b$.$ Calculate the IRR of each alternative $($use the trial$-$and$-$error method$)$

The IRR of Project $1$ is dots $($Round to the nearest one decimal place$)$

The IRR of Project $2$ is $\%($Round to the nearest one decimal place$)$

c$.$ Perform the incremental IRR analysis to determine the project that is more economical:

Incremental IRR $=-\%($Round to the nearest one decimal place$)$;

Therefore, based on the incremental IRR, Project $$ is more economical.

d$.$ Do the two methods produce the same recomendation for the most economical project?

A$.$ No

B$.$ Yes

economical. The result of the incremental analysis are always the same as those of the PW$,$ AW or FW analysis.