Question: For two mutually exclusive machines, which machine will you select if the MARR is 12% based on the concept of IRR? Years CF for Machine
For two mutually exclusive machines, which machine will you select if the MARR is 12% based on the concept of IRR?
| Years | CF for Machine A | CF for Machine B |
| 0 | $ (120,000) | $ (148,000) |
| 1 | $ 32,000 | $ 46,000 |
| 2 | $ 35,000 | $ 49,000 |
| 3 | $ 38,000 | $ 52,000 |
| 4 | $ 41,000 | $ 52,000 |
| 5 | $ 44,000 | $ (52,000) |
| 6 | $ (24,000) | $ 55,000 |
| 7 | $ 47,000 | $ 55,000 |
| 8 | $ (21,000) | $ (21,000) |
| Machine A | ||
| Machine B | ||
| Both need to be rejected. | ||
| Both are equally good. |
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