15) The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. Alt. A Alt. B Alt. C Initial cost $15,000 27,000 24,000 Annual benefits $4,500 7,600 6,500 RoR 15% 13% 11% Life in years 5 a) AROR for the first increment (Alt. C-Alt. A) is b) AROR for the second increment (Alt.B- Alt.A). c)The best alternative for a MARR of 4.0% using the incremental rate of return analysis is:
15) The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. Alt. A Alt. B Alt. C Initial cost $15,000 27,000 24,000 Annual benefits $4,500 7,600 6,500 RoR 15% 13% 11% Life in years 5 a) AROR for the first increment (Alt. C-Alt. A) is b) AROR for the second increment (Alt.B- Alt.A). c)The best alternative for a MARR of 4.0% using the incremental rate of return analysis is:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:15) The cash flows for three mutually exclusive alternatives are given in table below. MARR =
4%.
Alt. A
Alt. B
Alt. C
Initial cost
$15,000 27,000 24,000
Annual benefits $4,500
7,600
6,500
RoR
15%
13%
11%
Life in years
5
a) AROR for the first increment (Alt. C-Alt. A)
is
b) AROR for the second increment (Alt.B-
Alt.A).
c)The best alternative for a MARR of 4.0%
using the incremental rate of return analysis
is:
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