Using the incremental analysis to complete the table below and select the preferred alternative. Assume a MARR of 8% per year. The study period for each alternative is 20 years. The rank-order of alternatives from least capital investment to greatest capital investment is A => B => C => D.

	B A	C B	D C
Capital investment	-$850	-$1,000	-$1,150
Annual cost savings	130	150	140
Market value	700	750	800

	A.	Alternative A
	B.	Alternative B
	C.	Alternative C
	D.	Alternative D

Your company is considering three mutually exclusive alternatives for new trucks. The investment period is four years (equal lives), and the MARR is 18% per year. Which alternative should your company select?

Alternative	IRR	Capital Investment	Annual Receipts Less Expenses	Salvage Value
A	19.2%	$70,000	$5,000	$7,000
B	18.5%	$80,800	$6,200	$6,500
C	23%	$76,000	$4,000	$4,500

	A.	Alternative A
	B.	Alternative B
	C.	Alternative C
	D.	Alternative D

Your construction company is planning to purchase a new truck with a price of $25,000 for rental purposes. It requires a $355 expense fee annually to operate the truck for its useful life of 15 years. The expected income is $3,100 per year, and there is no salvage (market) value. What is the internal rate of return (IRR)? Interpolate as necessary using the interest rate tables.

	A.	5%
	B.	6%
	C.	7%
	D.	8%

Determine the best alternatives given in the table below using a MARR of 15%.

IRR Analysis:	Alternative A	Alternative B		Alternative C		Alternative D
Initial Investment	$100,000	$125,000		$150,000		$175,000
Annual Revenues	$50,000	$60,000		$70,000		$80,000
Annual Expenses	$30,000	$36,000		$39,500		$45,000
MV at end of life	$20,000	$7,500		$0		$15,000
Useful Life	10 years	10 years		10 years		10 years
IRR	16.3%	14.4%		15.9%		15.6%
Incremental Analysis:	(C A)		(D C)		( D A)
IRR	15.1%		13.8%		14.7%

	A.	Alternative A
	B.	Alternative B
	C.	Alternative C
	D.	Alternative D

There are three available alternatives given in the table below. Using the Benefit-Cost information shown below and an interest rate of 10% per year, which alternative should be selected?

	Alternative A	Alternative B	Alternative C
Capital Investment	$8.5M	$10M	$12M
Net Revenue less Expenses	$825,000	$1.5M	$1.75M
Useful Life	50 years	50 years	50 years
B/C Ratio	0.96	1.5	1.4

	A.	Alternative A
	B.	Alternative B
	C.	Alternative C
	D.	Alternative D