Which alternative of the three alternatives below should be selected if the MARR = 6%? Use the
Question:
Which alternative of the three alternatives below should be selected if the MARR = 6%?
Use the following to compare projects:
a. PW analysis
b. B/C ratio for each project
c. Incremental B/C ratio assessment (define Defender and Challenger in each analysis)
d. IRR for each project over its respective service life
e. Incremental IRR using the same (a common) number of years for each project
Are any of the projects acceptable? Are any not acceptable? Which project would you recommend and why?
Alternatives: A B C
First Cost $800 $300 $150
Uniform Annual Benefit $142 $60 $33.5
Service Life 4 years 5 years 10 years