Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Consider the following two mutually exclusive investment projects:
Determine the range of MARR where Project 2 would be preferred over Project 1 with "do-nothing" alternative.
(a) MARR ≤ 11.80%
(b) MARR ≥ 11.80%
(c) 11.80% ≤ MARR ≤ 18.88%
(d) MARR ≤ 18.88%
![Net Cash Flow
Year (n)
Project 1
Project 2
-$2,000
-$2,200
1
1,200
1,200
1,650
1,400
IRR
18.07%
18.88%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbb21df55-3f32-43c3-88c2-0c3bb7acb815%2F4ba8224d-9225-4aaf-af34-59b369a6ba1e%2Fulif8cm_processed.png&w=3840&q=75)
Transcribed Image Text:Net Cash Flow
Year (n)
Project 1
Project 2
-$2,000
-$2,200
1
1,200
1,200
1,650
1,400
IRR
18.07%
18.88%
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