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Incremental Rate of Return of "Row"-"Column" Project Initial Null A B C D E F Investment A $10,000 10% В 12,000 7% C 13,000 0.1% D 15,000 7 9 9% E 16,000 6. 5 1 6 3% F 18,000 8 5 5% G 23,000 7 3 8 7 4 3 2%

Incremental Rate of Return of "Row"-"Column" Project Initial Null A B C D E F Investment A $10,000 10% В 12,000 7% C 13,000 0.1% D 15,000 7 9 9% E 16,000 6. 5 1 6 3% F 18,000 8 5 5% G 23,000 7 3 8 7 4 3 2%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A large company has the opportunity to select one of seven projects: A, B, C, D, E, F, G, or the null (Do Nothing) alternative. Each project requires a single initial investment as shown in the table below. Information on each alternative was fed into a computer program that calculated the IRR for each project as well as all the pertinent incremental IRR(s) as shown in the table below. For example, the IRR for Project A is 10% and the incremental IRR of Project C minus Project B (C-B) is 0.1%. For each value of MARR below indicate which project is preferred and the evaluations you made to arrive at this conclusion. Solve, a. MARR = 12%. b. MARR = 9.5%. c. MARR = 8%. d. MARR = 3.5%. e. MARR = 1.5%.

Incremental Rate of Return of "Row"-"Column" Project Initial Null A B C D E F Investment A $10,000 10% В 12,000 7% C 13,000 0.1% D 15,000 7 9 9% E 16,000 6. 5 1 6 3% F 18,000 8 5 5% G 23,000 7 3 8 7 4 3 2%
Transcribed Image Text:Incremental Rate of Return of "Row"-"Column" Project Initial Null A B C D E F Investment A $10,000 10% В 12,000 7% C 13,000 0.1% D 15,000 7 9 9% E 16,000 6. 5 1 6 3% F 18,000 8 5 5% G 23,000 7 3 8 7 4 3 2%
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