Aline has three contracts from which to choose. The first contract will require an outlay of $100,000 but will return $165,000 one year from now. The second contract requires an outlay of $210,000 and will return $319,000 one year from now. The third contract requires an outlay of $280,000 and will return $396,000 one year from now. Only one contract can be accepted. If her MARR is 25 percent, which one should she choose? For the increment from the do-nothing alternative to the first contract, the IRR is percent. For the increment from the first contract to the second contract, the IRR is percent. For the increment from the second contract to the third contract, the IRR is percent. Therefore, should be chosen. (Type integers or decimals rounded to one decimal place as needed.)

Aline has three contracts from which to choose. The first contract will require an outlay of $100,000 but will return $165,000 one year from now. The second contract requires an outlay of $210,000 and will return $319,000 one year from now. The third contract requires an outlay of $280,000 and will return $396,000 one year from now. Only one contract can be accepted. If her MARR is 25 percent, which one should she choose? For the increment from the do-nothing alternative to the first contract, the IRR is percent. For the increment from the first contract to the second contract, the IRR is percent. For the increment from the second contract to the third contract, the IRR is percent. Therefore, should be chosen. (Type integers or decimals rounded to one decimal place as needed.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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