Question: Two machines have data as shown below. Using an incremental internal rate of return, which machine should be selected: Machine C Machine D Initial cost

Two machines have data as shown below. Using an incremental internal rate of return, which machine should be selected:

Machine C Machine D
Initial cost $550,000 $987,000
Life in years 2 3
Salvage after life 22% 32%
Benefits per year $384,000 $434,000
Costs per year $162,900 $196,800
MARR 8%
Inflation (increase in all costs) 5%
Increase in benefits 9%

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