-Two alternatives are shown in the table below. If the MARR is 20%, which alte mative should be selected and why? Remember to show your work!) (Estimated Rasponse Times for Awarage Student: 7 minutes) Year C C Altemative A $3.000) $1,200 $1,300 $1,300 Alemative B $1.500 $1.500 $1,500 a. Choose Altemative B because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the more expensive aftemative should be selected b. Choose Altemative B because it has an IRR of 11.25% where as Alternative A only has an IRR of 9.70% c. Choose Altemative A because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the cheaper alternative should be selected d. Choose Altemative A because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the cheaper altemative should be selected e. Choose Altemative B because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the more expensive altemative should be selected

-Two alternatives are shown in the table below. If the MARR is 20%, which alte mative should be selected and why? Remember to show your work!) (Estimated Rasponse Times for Awarage Student: 7 minutes) Year C C Altemative A $3.000) $1,200 $1,300 $1,300 Alemative B $1.500 $1.500 $1,500 a. Choose Altemative B because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the more expensive aftemative should be selected b. Choose Altemative B because it has an IRR of 11.25% where as Alternative A only has an IRR of 9.70% c. Choose Altemative A because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the cheaper alternative should be selected d. Choose Altemative A because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the cheaper altemative should be selected e. Choose Altemative B because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the more expensive altemative should be selected

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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