(Solved):The cash flows for three different alternatives are given in the table below. MARR = 10%. ||…

 

Question

The cash flows for three different alternatives are given in the table below. MARR = 10%.

Alt. A Alt. B Alt. C
Initial cost ($) 5,000 9,000 7,500
Annual benefits ($) 1,457 2,518, 2,133
RoR (%) 14 13 12.4
Life in years 5 5 5

The best alternative for a MARR of 10% using the incremental rate of return analysis is:

a) Alt. C.

b) Alt. A.

c) Alt. B.

d) Do nothing.

e) Other.

 

EXPERT ANSWER

The answer is the best alternative for a MARR of 10% using the incremental

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