Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR -10%. A B C D $15,000 $21,200 $36,000 45,000 First cost O&M Cost/ year 1,600 700 400 Benefit/year 8,000 Salvage value 3,000 Life in years 4 9,000 4,600 13,000 6,000 1,000 15,000 10,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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ISBN:9781337514835
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Chapter10: Capital Budgeting: Decision Criteria And Real Option
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Given the financial data for four mutually exclusive alternatives in the table below, determine the
best alternative using the incremental rate of return (AROR) analysis. MARR = 10%.
A B C D
$15,000 $21,200 $36,000
45,000
1,600 700 400 1,000
First cost
O &M Cost/
year
Benefit/year 8,000
9,000
13,000
Salvage value 3,000 4,600 6,000
Life in years 4
15,000
10,000
Transcribed Image Text:Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR = 10%. A B C D $15,000 $21,200 $36,000 45,000 1,600 700 400 1,000 First cost O &M Cost/ year Benefit/year 8,000 9,000 13,000 Salvage value 3,000 4,600 6,000 Life in years 4 15,000 10,000
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