The five alternatives shown below are being evaluated by the rate of return method. Incremental ROR when compared with alternative Alt B с D E Initial Invest, S -25,000 -35,000 -40,000 -60,000 -75,000 ROR vs DN,% 9.6 15.1 13.4 25.4 20.2 A B C DE 27.3 9.4 35.3 25 1.5 38.5 24.4 46.5 27.3 6.8 If the projects are mutually exclusive and the Minimum Attractive Rate of Return is 9.2% per year, the best alternative is: (a) Alt A (b) Alt B (c) Alt C (d) Alt D (e) Alt E
The five alternatives shown below are being evaluated by the rate of return method. Incremental ROR when compared with alternative Alt B с D E Initial Invest, S -25,000 -35,000 -40,000 -60,000 -75,000 ROR vs DN,% 9.6 15.1 13.4 25.4 20.2 A B C DE 27.3 9.4 35.3 25 1.5 38.5 24.4 46.5 27.3 6.8 If the projects are mutually exclusive and the Minimum Attractive Rate of Return is 9.2% per year, the best alternative is: (a) Alt A (b) Alt B (c) Alt C (d) Alt D (e) Alt E
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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
Transcribed Image Text:The five alternatives shown below are being evaluated by the rate of return method.
Incremental ROR
when compared
with alternative
B C D
27.3 9.4 35.3 25
E
1.5 38.5 24.4
Alt
B
D
E
Initial Invest, $ ROR vs DN,%
9.6
15.1
-25,000
-35,000
-40,000
-60,000
-75,000
13.4
25.4
20.2
A
---
---
(d) Alt D
46.5 27.3
6.8
...
If the projects are mutually exclusive and the Minimum Attractive Rate of Return
is 9.2% per year, the best alternative is:
(a) Alt A
(b) Alt B
(c) Alt C
(e) Alt E
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