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28 Sep 2019
A company has to choose between two alternatives. Alternative 1 has a cost of $250,000, an annual benefit of $2,500, and a life of 8 years. Alternative 2 has a $100,000 cost, an annual benefit of $1,750, and a life of 4 years. What is the IRR of the difference between the two alternatives, i.e. Alt 1 - Alt 2.
A company has to choose between two alternatives. Alternative 1 has a cost of $250,000, an annual benefit of $2,500, and a life of 8 years. Alternative 2 has a $100,000 cost, an annual benefit of $1,750, and a life of 4 years. What is the IRR of the difference between the two alternatives, i.e. Alt 1 - Alt 2.
Romarie Khazandra MarijuanLv10
28 Sep 2019
Related textbook solutions
Related questions
Data for four mutually exclusive alternatives are given in the table below. Assume a life of 6 years and a MARR of 10%.
|
Alt. A |
Alt. B |
Alt. C |
Alt. D Do Nothing |
|
|
Initial Cost |
$560 |
$340 |
$120 |
$0 |
|
EUAB |
$140 |
$100 |
$40 |
$0 |
|
Salvage Value |
$40 |
$0 |
$0 |
$0 |
The best alternative using benefit cost ratio analysis is ____________.
Question 3 options:
|
Alt. C |
|
|
Alt. A |
|
|
Alt. B |
|
|
Alt. D |
