Question: The cash flows for three different alternatives are given in table below. MARR =10%. Based on incremental rate of return analysis, what is the best
The cash flows for three different alternatives are given in table below. MARR =10%. Based on incremental rate of return analysis, what is the best alternative?
Show your work on your worksheet. Type in your answers to the nearest whole% (1.59% would be typed in as 2%)
|
| Alt. A | Alt. B | Alt. C |
| Initial cost | $5,000 | 9,000 | 7,500 |
| Annual benefits | $1,457 | 2,518 | 2,133 |
| Salvage | $250 | $1,240 | $1,450 |
| RoR | 15% | 20% | 18% |
| Life in years | 5 | ||
What is the incremental rate of return for the first challenger - defender evaluation:
What is the incremental rate of return for the second challenger - defender evaluation:
What is the best alternative for this analysis; Do- Nothing, A, B, or C
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