Problem #3: Six mutually exclusive projects A, B, C, D, E, and F, are being considered by XYZ. They have been ordered by first costs so that project A has the lowest first cost, project F the largest. Specifically, detailed cash flows for Projects A and B are given below. Project A: Initial Cost of $212,840. annual benefit of $25,000 for 20 years Project B: Initial Cost of $327,540, annual benefit of $35,000 for 20 years XYZ is using a MARR of 8%. (a) Based on the cash flows and the MARR of 8%, find the IRR for Project A. (b) Based on the cash flows for Project A and B, calculate the IRR for the increment from A to B. (c) The table below apply to all projects (A through F). The data can be interpreted as follows: the IRR on the incremental investment from project C to D is 7.5%. Based on the procedure discussed in this course, which project should be chosen using the same MARR of 8%?

Project	IRR on overall Investment	IRR on Increments of Investment Compared With Project
		A	B	C	D	E
A	?
B	9.52%	?
C	13.50%	13%	15%
D	10%	11%	13%	7.5%
E	19%	16%	6%	14%	7%
F	9.00%	9%	10%	12%	6%	7.50%