entified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are has been specified, and the MARR is 19% per year. Which site should be chosen based on the IRR criterion? view the alternatives description. ld you choose as a base one? Choose the correct answer below. ebetween the base alternative and the second-choice alternative. =%. (Round to one decimal place.)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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10
Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A
10-year study period has been specified, and the MARR is 19% per year. Which site should be chosen based on the IRR criterion?
E Click the icon to view the alternatives description.
Which alternative would you choose as a base one? Choose the correct answer below.
O A. Alternative C
O B. Alternative E
*c. Alternative B
XD. Alternative D
O E. Alternative A
O F. Alternative F
Analyze the difference between the base alternative and the second-choice alternative.
IRR A
V) =
%. (Round to one decimal place.)
Transcribed Image Text:Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A 10-year study period has been specified, and the MARR is 19% per year. Which site should be chosen based on the IRR criterion? E Click the icon to view the alternatives description. Which alternative would you choose as a base one? Choose the correct answer below. O A. Alternative C O B. Alternative E *c. Alternative B XD. Alternative D O E. Alternative A O F. Alternative F Analyze the difference between the base alternative and the second-choice alternative. IRR A V) = %. (Round to one decimal place.)
A
B
C
D
E
F
Investment cost
$80
$130
$230
$370
$470
$750
(thousands)
Annual revenue
$13
$40.5
$58
$111.5
$133.5
$163.5
minus expense
(thousands)
IRR on total
16.2%
31.2%
25.2%
30.1%
28.4%
21.8%
investment
Transcribed Image Text:A B C D E F Investment cost $80 $130 $230 $370 $470 $750 (thousands) Annual revenue $13 $40.5 $58 $111.5 $133.5 $163.5 minus expense (thousands) IRR on total 16.2% 31.2% 25.2% 30.1% 28.4% 21.8% investment
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