The following two alternatives are given.) Data First Cost Annual Cost Annual Benefit Life, Years Salvage Value A $8,200 $1,000 $2,700 B $5,600 $800 $2,100. 7 $1,000 $2,800 Assume that MARR is 10%. Use the incremental rate of return analysis to determine which alternative (A or B) one should choose. (Hint: Find AIRR) Compute the incremental cash flow A.
The following two alternatives are given.) Data First Cost Annual Cost Annual Benefit Life, Years Salvage Value A $8,200 $1,000 $2,700 B $5,600 $800 $2,100. 7 $1,000 $2,800 Assume that MARR is 10%. Use the incremental rate of return analysis to determine which alternative (A or B) one should choose. (Hint: Find AIRR) Compute the incremental cash flow A.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following two alternatives are given.
Data
First Cost
Annual Cost
Annual Benefit
Life, Years
Salvage Value
$8,200
$1,000
$2,700
7
$2,800
B
$5,600
$800
$2,100.
$1,000
Assume that MARR is 10%. Use the incremental rate of return analysis to determine which
alternative (A or B) one should choose. (Hint: Find AIRR)
Compute the incremental cash flow A.
Find the AIRR or a range of AIRR.
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