The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%.Alt A$15,000$4,50015%Initial costAnnual benefitsRORLife in yearsReference Case Study 8Alt B27,0007,60013%5Alt C24,0006,50011%Determine the AROR for the second increment (Alt. B- Alt.A) if A was retained during the first incremental analysis.OA.5.78%B. 10.85%O C.9.19%OD.8 12%4

Incremental rate of return is a tool of financial analysis which helps investors to compare…

Initial cost Annual benefits ROR Life in years Alt. A $15,000 $4,500 15% Alt. B 27,000 7,600 13% 538 Alt. C 24,000 6,500 11% Reference Case Study & Determine the AROR for the second increment (Alt. B- Alt.A) if A was retained during the first incremental analysis. OA.5.78% OB. 10.85% OC.9.19% OD 8 12 % 4

Initial cost Annual benefits ROR Life in years Alt. A $15,000 $4,500 15% Alt. B 27,000 7,600 13% 538 Alt. C 24,000 6,500 11% Reference Case Study & Determine the AROR for the second increment (Alt. B- Alt.A) if A was retained during the first incremental analysis. OA.5.78% OB. 10.85% OC.9.19% OD 8 12 % 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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