l company is consi pment Data concerning the three best Ful life of the equipment is 20 years and MARR=9A at is the incremental return on the first incremental pair bahen ardered by creasing investment) IRRI Ans LS Ars L What is the incremental IRR on the second pair? Ans X Which alternative would you select? C
l company is consi pment Data concerning the three best Ful life of the equipment is 20 years and MARR=9A at is the incremental return on the first incremental pair bahen ardered by creasing investment) IRRI Ans LS Ars L What is the incremental IRR on the second pair? Ans X Which alternative would you select? C
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Question 4
A local company is considering in investing in new, more productive
equipment Data concerning the three best aternatives are show below. The
useful life of the equipment is 20 years and MARR =9K
What is the incremental return on the first incremental pair (ahen andered by
increasing investment) RRI
Ars
What is the incremental IRR on the second pair?
Ars
Which alternative would you select?
Ans. X
B
C
Initial
S66.000.00
$55,000.00 $23.500.00 $17,32000
investment
$7.830.00
Annual net
$6.093.00 $3.177.00 $165300
income
Salvage value $4.500.00 $3.23200 $1.73a0
1237%
S8.230.00
10.40%
7.465
9.35%
IRR](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4b13d022-4932-4c70-a92e-cdd0fb4e4c30%2F81e62f87-6c32-4b52-820f-3aae917fd1ce%2Fhcrgcr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 4
A local company is considering in investing in new, more productive
equipment Data concerning the three best aternatives are show below. The
useful life of the equipment is 20 years and MARR =9K
What is the incremental return on the first incremental pair (ahen andered by
increasing investment) RRI
Ars
What is the incremental IRR on the second pair?
Ars
Which alternative would you select?
Ans. X
B
C
Initial
S66.000.00
$55,000.00 $23.500.00 $17,32000
investment
$7.830.00
Annual net
$6.093.00 $3.177.00 $165300
income
Salvage value $4.500.00 $3.23200 $1.73a0
1237%
S8.230.00
10.40%
7.465
9.35%
IRR
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