incremental IRR cell.b. Determine the incremental IRR value that belongs in the overprinted cell.с.If MARR is 37 percent/year, which project is preferred?d. Based on the data in the table, if MARR is 40 percent, specify whether the present worth of each project wouldbe positive, negative, or zero when evaluated at MARR?35. The four alternatives described below are being evaluated:VILEY OAlternativeWXYInitial Investment$100,000$75,000$40,000$200,000IRR16%15%29%14%ТextThe Incremental IRRS are:IRRW-Y7%IRRW-x= 20%IRRX-Y1%IRRZ-x14%IRRZ-y = 10%IRRZ-w= 12%15.5 percent/year?9.5 percent/year?а.If the alternatives are independent, which one(s) should be selected if MARR =b. If the alternatives are mutually exclusive, which one(s) should be selected if MARR =The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resourceplanning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expectedto increase revenue $125,000 per year every year. The software and installation from Vendor B costs$280,000 and is expected to increase revenue $95,000 per year. Manuel's uses a 4-year planning horizon and a36.VILEY O

Answered: Image /qna-images/answer/39f4c9e6-def1-409d-85df-5d0ef03c2e3b.jpg

The four alternatives described below are being evaluated: Alternative Initial Investment IRR W $100,000 16% The Incremental IRRs are: IRRW-Y = 7% X $75,000 15% Text IRRW-X = 20% Y $40,000 29% Z $200,000 14%

The four alternatives described below are being evaluated: Alternative Initial Investment IRR W $100,000 16% The Incremental IRRs are: IRRW-Y = 7% X $75,000 15% Text IRRW-X = 20% Y $40,000 29% Z $200,000 14%

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

incremental IRR cell.
b. Determine the incremental IRR value that belongs in the overprinted cell.
с.
If MARR is 37 percent/year, which project is preferred?
d. Based on the data in the table, if MARR is 40 percent, specify whether the present worth of each project would
be positive, negative, or zero when evaluated at MARR?
35. The four alternatives described below are being evaluated:
VILEY O
Alternative
W
X
Y
Initial Investment
$100,000
$75,000
$40,000
$200,000
IRR
16%
15%
29%
14%
Тext
The Incremental IRRS are:
IRRW-Y
7%
IRRW-x
= 20%
IRRX-Y
1%
IRRZ-x
14%
IRRZ-y = 10%
IRRZ-w
= 12%
15.5 percent/year?
9.5 percent/year?
а.
If the alternatives are independent, which one(s) should be selected if MARR =
b. If the alternatives are mutually exclusive, which one(s) should be selected if MARR =
The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource
planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected
to increase revenue $125,000 per year every year. The software and installation from Vendor B costs
$280,000 and is expected to increase revenue $95,000 per year. Manuel's uses a 4-year planning horizon and a
36.
VILEY O

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