For the five alternatives described in the table onright.Note: the third column is ROR of each project(i"), while incremental ROR are Ai* values. AtMARR of 15%, which project or projects should beselected, using ROR analysis method ?1- if they are independents:2- If they are mutually exclusive: fill in the stepsbelow based on the comparison with MARR = 15%IncrementalRate of Return,%InitialAlternative Investment, S versus DN, % AOverall RORStep 1: Exclude alternativesand-25.000-35,000-40.000-60,000-75.0009.615.113.4- 27.3 9.4 35.3 25.038.5 24.4-46.5 27.36,8Bfrom competitionD25.420.2Step 2:(challenger) VS(defender), Ai* =-----> selectStep 3:(new challenger) VS(new defender), Ai* =74° 2- If they are mutually exclusive: fill in the stepsbelow based on the comparison with MARR = 15%TITIncrementalRate of Return, %InitialAlternative Investment, $ versus DN, % AOverall RORStep 1: Exclude alternativesand-25,000-35,000-40,000-60,0009.615.113.4- 27.3 9.4 35.3 25.038.5 24.4- 46.5 27.3from competition25.46.8-75,00020.2Step 2:(challenger) VS(defender), Ai* =-> selectStep 3:( new challenger) VS(new defender), Ai* =%3D-> select----74

Answered: Image /qna-images/answer/32c07d3b-dfa3-4efa-b5c4-f1c6ebf7bd0b.jpg

For the five altematives described in the table on right.Note: the third column is ROR of each project (i"), while incremental ROR are Ai* values. At MARR of 15%, which project or projects should be selected, using ROR analysis method ? 1- if they are independents:

For the five altematives described in the table on right.Note: the third column is ROR of each project (i"), while incremental ROR are Ai* values. At MARR of 15%, which project or projects should be selected, using ROR analysis method ? 1- if they are independents:

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 3E

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Question

For the five alternatives described in the table on
right.Note: the third column is ROR of each project
(i"), while incremental ROR are Ai* values. At
MARR of 15%, which project or projects should be
selected, using ROR analysis method ?
1- if they are independents:
2- If they are mutually exclusive: fill in the steps
below based on the comparison with MARR = 15%
Incremental
Rate of Return,%
Initial
Alternative Investment, S versus DN, % A
Overall ROR
Step 1: Exclude alternatives
and
-25.000
-35,000
-40.000
-60,000
-75.000
9.6
15.1
13.4
- 27.3 9.4 35.3 25.0
38.5 24.4
-46.5 27.3
6,8
B
from competition
D
25.4
20.2
Step 2:
(challenger) VS
(defender), Ai* =
-----> select
Step 3:
(new challenger) VS
(new defender), Ai* =
74°

2- If they are mutually exclusive: fill in the steps
below based on the comparison with MARR = 15%
TIT
Incremental
Rate of Return, %
Initial
Alternative Investment, $ versus DN, % A
Overall ROR
Step 1: Exclude alternatives
and
-25,000
-35,000
-40,000
-60,000
9.6
15.1
13.4
- 27.3 9.4 35.3 25.0
38.5 24.4
- 46.5 27.3
from competition
25.4
6.8
-75,000
20.2
Step 2:
(challenger) VS
(defender), Ai* =
-> select
Step 3:
( new challenger) VS
(new defender), Ai* =
%3D
-> select
----
74

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