The Royal Victoria Hospital is evaluating new office equipment offered by three companies.     Company A Company B Company C Cost $500 $600 $700 Annual benefit 130 115 100 End of useful life salvage value 0 250 180 Useful life (yrs) 5 10 15   The incremental rate of return between Company A and Company B is close to:   Select one: a. 30% b. 25% c. 9.5% d. 8.5%

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
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The Royal Victoria Hospital is evaluating new office equipment offered by three companies.

 

 

Company A

Company B

Company C

Cost

$500

$600

$700

Annual benefit

130

115

100

End of useful life salvage value

0

250

180

Useful life (yrs)

5

10

15

 

The incremental rate of return between Company A and Company B is close to:

 

Select one:

a. 30%

b. 25%

c. 9.5%

d. 8.5%

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