Question: Two flight guidance systems are being evaluated for a backup control tower at a local airport. One system utilizes conventional radar and the other uses

Two flight guidance systems are being evaluated for a backup control tower at a local airport. One system utilizes conventional radar and the other uses a global positioning system (GPS) . Given a MARR of 12% per year and the cash flow as summarized in the table below, use the IRR method to determine which of the two guidance systems is more economical. Note: These are "cost only" alternatives.

	Radar	GPS
Captial investment	$300,000	$450,000
Annual exprenses	$60,000	$30,000
Useful life	6 years	6 years
Market value at end of useful life	$40,000	$80,000

The incremental IRR is ___% (Write as whole number to the nearest decimal place, e.g., if 12.4% type 12.4)

Which alternative should be selected? Choose the correct answer below.

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