Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Please answer
![The five independent projects shown below are under
consideration for implementation by KNF Neuber-
ger, Inc. The company's MARR is 15% per year.
(a) Determine which projects should be under-
taken on the basis of IROR if the budget
limitation is $97,000. (Solve by hand or
spreadsheet as instructed.)
(b) Determine the overall rate of return if the
money not invested in projects is assumed to
earn a rate of return equal to the MARR.
Annual
Project
Project First Cost, $ Income, $ per Year Life, Years
9,000
4,900
11,100
9,000
10,000
L
- 30,000
-15,000
- 45,000
- 70,000
-40,000
10
10
10
10
10
ANDT](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0699751a-4ec8-425b-ba50-e4551666f002%2F642be0f9-fbf6-41ce-8d5c-ecb807595a25%2F2ffx6o9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The five independent projects shown below are under
consideration for implementation by KNF Neuber-
ger, Inc. The company's MARR is 15% per year.
(a) Determine which projects should be under-
taken on the basis of IROR if the budget
limitation is $97,000. (Solve by hand or
spreadsheet as instructed.)
(b) Determine the overall rate of return if the
money not invested in projects is assumed to
earn a rate of return equal to the MARR.
Annual
Project
Project First Cost, $ Income, $ per Year Life, Years
9,000
4,900
11,100
9,000
10,000
L
- 30,000
-15,000
- 45,000
- 70,000
-40,000
10
10
10
10
10
ANDT
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