Bawal gumamit ng excel( Don't use Excel) A small company has P20,000 in surplus capital that it wishes to invest in new revenue producing  projects. Three independent sets of mutually exclusive projects have been developed. The useful  life of each is five years and all market values are zero. You have been asked to perform an IRR  analysis to select the best combination of projects. If the MARR is 12% per year, which  combination of projects would you recommend?

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter20: The Problem Of Adverse Selection Moral Hazard
Section: Chapter Questions
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Engineering Economics

Bawal gumamit ng excel( Don't use Excel)

A small company has P20,000 in surplus capital that it wishes to invest in new revenue producing 
projects. Three independent sets of mutually exclusive projects have been developed. The useful 
life of each is five years and all market values are zero. You have been asked to perform an IRR 
analysis to select the best combination of projects. If the MARR is 12% per year, which 
combination of projects would you recommend?

Capital investment (P)
5,000
7,000
Project
Net annual benefits (P)
1,500
1,800
Mutually exclusive
Al
A2
Mutually exclusive
B1
12,000
2,000
4,000
4,000
4,500
B2
18,000
14,000
Mutually exclusive
C1
C2
18,000
Transcribed Image Text:Capital investment (P) 5,000 7,000 Project Net annual benefits (P) 1,500 1,800 Mutually exclusive Al A2 Mutually exclusive B1 12,000 2,000 4,000 4,000 4,500 B2 18,000 14,000 Mutually exclusive C1 C2 18,000
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