Question: Q1: How to use incremental rate of return analysis given two alternatives and choosing which one is the best? Q2: Case 1: Alternative 1 Alternative

Q1: How to use incremental rate of return analysis given two alternatives and choosing which one is the best?

Q2:

Case 1: Alternative 1 Alternative 2

Cost 500 700

Annual Cost . 600 800

Annual Benefit 700 . 900

Case 1: Alternative 1 Alternative 2

Cost 700 500

Annual Cost . 800 600

Annual Benefit 900 700

Based on these two cases, how to I apply incremental return analysis to this, and instead of using incremental rate of return analysis, can we use rate of return analysis on both alternatives and determine which alternative is better?

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ANSWER Incremental rate of return analysis IRR is a method used to compare two or more alternative investment projects by considering the incremental ... View full answer

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