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Which alternative should be selected using incremental rate of return analysis, if MARR = 8.5%? %3D Do-nothing A First cost $5,500 $3,000 $9,500 $4,500 Annual 895 575 1,751 626 benefit Life 10 yrs ROR 10.0% 14.0% 13.0% 6.5%

Which alternative should be selected using incremental rate of return analysis, if MARR = 8.5%? %3D Do-nothing A First cost $5,500 $3,000 $9,500 $4,500 Annual 895 575 1,751 626 benefit Life 10 yrs ROR 10.0% 14.0% 13.0% 6.5%

Essentials Of Investments
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
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Which alternative should be selected using incremental rate of return analysis, if MARR = 8.5%? Do-nothing A B C First cost $5,500 $3,000 $9,500 $4,500 Annual 895 575 1,751 626 benefit Life 10 yrs ROR 10.0% 14.0% 13.0% |6.5% O B, because its ROR is the highest O something other than C, because C costs the most initially O C, because the C-B increment has a ROR of 12.53% and the A-B increment has a ROR of 4.76% O C because C has the highest annual benefit
Transcribed Image Text:Which alternative should be selected using incremental rate of return analysis, if MARR = 8.5%? Do-nothing A B C First cost $5,500 $3,000 $9,500 $4,500 Annual 895 575 1,751 626 benefit Life 10 yrs ROR 10.0% 14.0% 13.0% |6.5% O B, because its ROR is the highest O something other than C, because C costs the most initially O C, because the C-B increment has a ROR of 12.53% and the A-B increment has a ROR of 4.76% O C because C has the highest annual benefit
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