determine the Internal Rate of Return (IRR) of Gamma and Beta, and the incremental Internal Rate of Return (ΔIRR) between Alpha and Gamma

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The owner of a seniors' residence is planning the purchase an electrical generator to minimize the discomfort due to electrical power outages. The key parameters of the three advertising campaigns are provided below. Project Parameters 1. Initial Cost ($) Alpha 600,000 600,000 at EOY1 decreasing by 2% annually thereafter. 400,000 at EOY1 increasing by 4,000 annually thereafter. Gamma 800,000 770,000 at EOY1 900,000 at EOY1 increasing by 1% annually thereafter. 640,000 at EOY1 increasing by 40,000 annually thereafter. Beta 700,000 increasing by 5,000 annually thereafter. 572,000 at EOY1 increasing by 1% annually thereafter. 2. Revenues ($) 3. Operating Costs ($) 4. End-of-life salvage value ($) 5. Useful life (years) 15,000 10,000 5 10 • Industry Sstandard = 4 years MARR = 10% The owner of a seniors' residence is planning the purchase an electrical generator to minimize the discomfort due to electrical power outages. The key parameters of the three advertising campaigns are provided below. Project Parameters 1. Initial Cost ($) Alpha 600,000 600,000 at EOY1 decreasing by 2% annually thereafter. 400,000 at EOY1 increasing by 4,000 annually thereafter. Gamma 800,000 770,000 at EOY1 900,000 at EOY1 increasing by 1% annually thereafter. 640,000 at EOY1 increasing by 40,000 annually thereafter. Beta 700,000 increasing by 5,000 annually thereafter. 572,000 at EOY1 increasing by 1% annually thereafter. 2. Revenues ($) 3. Operating Costs ($) 4. End-of-life salvage value ($) 5. Useful life (years) 15,000 10,000 5 10 • Industry Sstandard = 4 years MARR = 10%