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
Problem 1PS
Related questions
Question
Use increasing capital investment
Transcribed Image Text:6-14. The estimated negative cash flows for three design
alternatives are shown below. The MARR is 12% per year
and the study period is seven years. Which alternative is
best based on the IRR method? Doing nothing is not an
option. (6.4.2)
Alternative
EOY
A
C
Capital investment
Annual expenses
0 $ 85,600 $63,200 $71,800
1-7
7,400
12,100
10,050
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