Use incremental analysis to evaluate the 2 alternatives. Assume a seven year life and a MARR...

 

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Use incremental analysis to evaluate the 2 alternatives. Assume a seven year life and a MARR of 15% (IRRS for each is given). Would picking the highest IRR give you the best investment decision? Initial Investment O&M Costs Annual Benefit Salvage Value IRR Alt A $21,000 $2,000 $8,000 $5,000 23.20% Alt B $16,000 $3,000 $7,500 $8,000 24.80% Initial Investment O&M Costs Annual Benefit Salvage Value IRR Alt A $21,000 $2,000 $8,000 $5,000 23.20% Alt B $16,000 $3,000 $7,500 $8,000 24.80% A-B Use incremental analysis to evaluate the 2 alternatives. Assume a seven year life and a MARR of 15% (IRRS for each is given). Would picking the highest IRR give you the best investment decision? Initial Investment O&M Costs Annual Benefit Salvage Value IRR Alt A $21,000 $2,000 $8,000 $5,000 23.20% Alt B $16,000 $3,000 $7,500 $8,000 24.80% Initial Investment O&M Costs Annual Benefit Salvage Value IRR Alt A $21,000 $2,000 $8,000 $5,000 23.20% Alt B $16,000 $3,000 $7,500 $8,000 24.80% A-B

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ANSWER Incremental analysis compares the difference between two alternatives In this case the two al... View the full answer