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 D First cost $15,000 $21,200 $36,000 45,000 O &M Cost/ 1,600 700 400 1,000 year Benefit/year 8,000 9,000 13,000 15,000 Salvage value 3,000 4,600 6,000 10,000 Life in years 5

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 D First cost $15,000 $21,200 $36,000 45,000 O &M Cost/ 1,600 700 400 1,000 year Benefit/year 8,000 9,000 13,000 15,000 Salvage value 3,000 4,600 6,000 10,000 Life in years 5

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 15P

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