A firm is considering three mutually exclusive alternatives as part of an upgrade to an existing transportation network. Installed cost $40,000 $6,400 $30,000 $5.650 $20 000 Net annual revenue $5,250 Salvage value Usetul ife 20 years 20 years 18.2% 10 years 22.9% Calculated IRR 15.0% AL EOY 10, allernative l would be replaced with another alternative N having the same installed cost and net annual revenues. II MARR is 10% per year, which alternative (if any) should be chosen? Use the incremental IRR procedure. Arrange (rank order) the teasible alternatives to use the incremental IRR procedure (Hint DN indicates "do nothing" alternative) Choose the correct answer below O A. (N. NI, DN OB. DN, I. M. NI OC. DN, IN N I OD. DN. AI Pertam the ncremental RR Analysis. Filn the tabile below (Round to one decimal place) Alternative to be Investment Inc. IRR selected

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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A firm is considering three mutually exclusive alternatives as part of an upgrade to an existing transportation network.
Installed cost
$40,000
$6,400
$30,000
$20,000
Net annual revenue
$5.650
$5,250
Salvage value
Useful life
20 years
20 years
10 years
Calculated IRR
15.0%
18.2%
22.9%
At EOY 10, alternative NI would be replaced with another alternative having the same installed cost and net annual revenues. If MARR is 10% per year, which
alternative (if any) should be chosen? Use the incremental IRR procedure.
Arrange (rank order) the teasible alternatives to use the incremental IRR procedure (Hint DN indicates "do nothing" alternative). Choose the correct answer below
O A. I, I, I, DN
O B. DN, I, N, NI
Oc. DN, ,N,
O D. DN. .I
Perform the incremental IRR Analysis. Fil-in the table below (Round to one decimal place)
Incremental
Alternative to be
Investment
Inc. IRR
selected
Transcribed Image Text:A firm is considering three mutually exclusive alternatives as part of an upgrade to an existing transportation network. Installed cost $40,000 $6,400 $30,000 $20,000 Net annual revenue $5.650 $5,250 Salvage value Useful life 20 years 20 years 10 years Calculated IRR 15.0% 18.2% 22.9% At EOY 10, alternative NI would be replaced with another alternative having the same installed cost and net annual revenues. If MARR is 10% per year, which alternative (if any) should be chosen? Use the incremental IRR procedure. Arrange (rank order) the teasible alternatives to use the incremental IRR procedure (Hint DN indicates "do nothing" alternative). Choose the correct answer below O A. I, I, I, DN O B. DN, I, N, NI Oc. DN, ,N, O D. DN. .I Perform the incremental IRR Analysis. Fil-in the table below (Round to one decimal place) Incremental Alternative to be Investment Inc. IRR selected
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