Question: Use incremental analysis to evaluate the 2 alternatives. Assume an eight year life and a MARR of 10%. Would picking the investment with highest IRR

Use incremental analysis to evaluate the 2 alternatives. Assume an eight year life and a MARR of 10%. Would picking the investment with highest IRR give you the best investment decision?

x Alt A Alt B

Initial investment $10,000 $6,800

O&M costs $1,250 $600

Annual benefit $3,000 $2,000

Salvage value $3,000 $0

IRR 11.8% $12.6%

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