Question: Four Projects are being studied by RTC Inc. The table below provide the first cost as well as the overall and incremental Internal Rate of
Four Projects are being studied by RTC Inc. The table below provide the first cost as well as the overall and incremental Internal Rate of Interest (IRR) for the four Projects. Use the information in the table to answer the following (Hint:- for instant 9% in the table below could be First Project cost interpreted as IRR 2-1). IRR on Increments of Investment RR on Overall Investment Compared with Project 1 $100,000 19% xx xx $ 2 175,000 S-1. 9% xx XX 3 $200,000 18.1. 17-1 23% xx 4 $250,000 16.1. 12% 17% 13-1 (a) If the four projects are independent, which projects should be selected at MARR of 17% ? is 9 (b) If the Four Projects are mutually exclusive, which Project should be selected at MARR of 15%.? (Note: do nothing Possible alternative) (e) State the Case (s) in which rate of return method is recommended (d) Is it always necessary for the alternative with the higher rate of return to be best alternative
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