Incremental ROR Analysis:

1. Two machines are being considered for purchase. If the MARR (here, the minimum required interest rate) is 10%, which machine should be bought?

	Machine X	Machine Y
Initial cost	$200	$700
Uniform annual benefit	95	120
End-of-useful-life salvage value	50	150
Useful life, in years	6	12

RoR Analysis for a Single Cash Flow:

2. Compute the exact ROR for the following cash flow. The MARR is 10%. You have to show your interpolation steps, if applicable, for complete points.

Initial Cost 300K

Annual Benefits 60K

Salvage 50K

Overhaul expenses on the 5^th year 2.5K

Life 10 years