Water purification facilities are in the planning stage, with expected lives of 10 years. Two final plans are being compared using a MARR of 15%. Which alternative is preferred using incremental IRR? First Cost O&M Cost Alt. A $1,200,000 30,000 Alt. B $800,000 20,000

Water purification facilities are in the planning stage, with expected lives of 10 years. Two final plans are being compared using a MARR of 15%. Which alternative is preferred using incremental IRR? First Cost O&M Cost Alt. A $1,200,000 30,000 Alt. B $800,000 20,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Water purification facilities are in the planning stage, with expected lives of 10 years. Two
final plans are being compared using a MARR of 15%. Which alternative is preferred using incremental
IRR?
First Cost
O&M Cost
Annual Benefits
Salvage Value
Alt. A
Alt. B
$1,200,000 $800,000
20,000
250,000
-20,000
30,000
350,000
50,000

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