Two mutually exclusive cost alternatives, Machine A and Machine B, are being evaluated. Given the following time events and incremental cash flow, if the MARR is 12% per year, which alternative (Machine A or Machine B) should be selected on the basis of the incremental rate of return analysis? Assume Machine B requires the extra $20,000 initial investment.

Year	Incremental Year Cash Flow $(Machine B-A)
0	-20,000
1 - 4	3,500
5 - 7	5,600
8	7,500

Question 14 options:

	The "Incremental ROR" is less than the MARR, so select Machine A
	The "Incremental ROR" is more than the MARR, so select Machine A
	Select neither Machine A nor Machine B and go with DN
	The "Incremental ROR" is more than the MARR, so select Machine B