The table below summarizes the comparison between four mutually exclusive alternatives using the IRR method. The MARR is 10%. Which alternative should be the base allemative in the first step of the incremental analysis? Alternative Initial Cost Annual Income IRR P $110.000 $21.500 14.5% Q $130,000 $31,200 20.2% OA Atemative R because it has the lowest initial cost OB. Allemative 5 because it has the largest initial cost OC. Allamative Q because it has the highest IRR OD. Alemative P because it has the lowest IRR R $95,000 $20,000 16.5% $354,000 $74,000 16.3%

The table below summarizes the comparison between four mutually exclusive alternatives using the IRR method. The MARR is 10%. Which alternative should be the base allemative in the first step of the incremental analysis? Alternative Initial Cost Annual Income IRR P $110.000 $21.500 14.5% Q $130,000 $31,200 20.2% OA Atemative R because it has the lowest initial cost OB. Allemative 5 because it has the largest initial cost OC. Allamative Q because it has the highest IRR OD. Alemative P because it has the lowest IRR R $95,000 $20,000 16.5% $354,000 $74,000 16.3%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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