Two mutually exclusive alternatives are being considered. Alternative A has an initial cost of $100 and uniform annual benefit of $19.93. The useful life is 10 years, and the IRR is 15% Alternative B has an initial cost of $50 and uniform annual benefit of $11.93. The useful life is 10 years, and the IRR is 20% The MARR is 8%. Which of the following equation(s) will solve for the IRR that allows you to make a correct decision based on Rate of Return Analysis? O PW(A) = -100+ 19.93(P/A, i*, 10) PW(B) = -50+ 11.93(P/A, i*, 10) O PW(A) = -100+ 19.93(P/A, 8 %, 10) PW(B) = -50+ 11.93(P/A, 8%, 10) PW 50-8(P/A, i*, 10) O PW = 50+ 8(P/A, i", 10) PW50+ 8(P/A, i*, 10) O PW 50+ 8(P/A, 8%, 10) = O PW(A) = 100 - 19.93(P/A, i*, 10) PW(B) = 50 - 11.93(P/A, i*, 10) PW(A) = 100-19.93(P/A, 8%, 10) PW(B) = 50-11.93(P/A, 8%, 10) O Choose Alternative B, since the IRR is the largest. Choose both Alternative A and B, since IRR is greater than the MARR.

Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
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Two mutually exclusive alternatives are being considered.
Alternative A has an initial cost of $100 and uniform annual benefit of $19.93. The useful life is 10 years, and the IRR is 15%
Alternative B has an initial cost of $50 and uniform annual benefit of $11.93. The useful life is 10 years, and the IRR is 20%
The MARR is 8%.
Which of the following equation(s) will solve for the IRR that allows you to make a correct decision based on Rate of Return Analysis?
O PW(A) = -100+ 19.93(P/A, i*, 10)
PW(B) = -50+ 11.93(P/A, i*, 10)
O PW(A) = -100+ 19.93(P/A, 8 %, 10)
PW(B) = -50+ 11.93(P/A, 8%, 10)
O PW-50-8(P/A, i*, 10)
O PW 50+ 8(P/A, i*, 10)
O PW-50 + 8(P/A, i*, 10)
O PW = 50+ 8(P/A, 8%, 10)
O PW(A) = 100 - 19.93(P/A, i*, 10)
PW(B) = 50- 11.93(P/A, i*, 10)
O PW(A) = 100 - 19.93(P/A, 8 %, 10)
PW(B) = 50 - 11.93(P/A, 8%, 10)
O Choose Alternative B, since the IRR is the largest.
O Choose both Alternative A and B, since IRR is greater than the MARR.
Transcribed Image Text:Two mutually exclusive alternatives are being considered. Alternative A has an initial cost of $100 and uniform annual benefit of $19.93. The useful life is 10 years, and the IRR is 15% Alternative B has an initial cost of $50 and uniform annual benefit of $11.93. The useful life is 10 years, and the IRR is 20% The MARR is 8%. Which of the following equation(s) will solve for the IRR that allows you to make a correct decision based on Rate of Return Analysis? O PW(A) = -100+ 19.93(P/A, i*, 10) PW(B) = -50+ 11.93(P/A, i*, 10) O PW(A) = -100+ 19.93(P/A, 8 %, 10) PW(B) = -50+ 11.93(P/A, 8%, 10) O PW-50-8(P/A, i*, 10) O PW 50+ 8(P/A, i*, 10) O PW-50 + 8(P/A, i*, 10) O PW = 50+ 8(P/A, 8%, 10) O PW(A) = 100 - 19.93(P/A, i*, 10) PW(B) = 50- 11.93(P/A, i*, 10) O PW(A) = 100 - 19.93(P/A, 8 %, 10) PW(B) = 50 - 11.93(P/A, 8%, 10) O Choose Alternative B, since the IRR is the largest. O Choose both Alternative A and B, since IRR is greater than the MARR.
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