# The following cash flow estimates have been developed for two mutually exclusive investment alternatives. a. Find the

## Question:

a. Find the internal rate of return on the incremental cash flow (A2-A1).

b. Calculate the PW on total investment for each alternative for a MARR of 16% and select the best alternative.

c. Calculate the PW on incremental investment for each alternative for a MARR of 16% and select the best alternative.

Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... MARR

**M**inimum

**A**cceptable

**R**ate of

**R**eturn (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...

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**Related Book For**

## Engineering Economy

**ISBN:** 978-0132554909

15th edition

**Authors:** William G. Sullivan, Elin M. Wicks, C. Patrick Koelling