The following information is provided for five mutually exclusive alternatives that have 20-year useful lives. If the MARR is 12%, which alternative be selected? Use incremental rate of return Alternatives A B D E Cost $4,000 $2,000 $6,000 $1,000 $9,000 Annual Benefit $639 $410 $761 $117 $785 PW of Benefit $7,330 $4,700 $8,730 $1,340 $9,000 Rate of Return 15% 20% 11% 10% 6%

The following information is provided for five mutually exclusive alternatives that have 20-year useful lives. If the MARR is 12%, which alternative be selected? Use incremental rate of return Alternatives A B D E Cost $4,000 $2,000 $6,000 $1,000 $9,000 Annual Benefit $639 $410 $761 $117 $785 PW of Benefit $7,330 $4,700 $8,730 $1,340 $9,000 Rate of Return 15% 20% 11% 10% 6%

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 10E

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