3) Two investment options are analyzed against each other. They both have an internal rate of return above the MARR of 10%. They both have lives of 8 years. Using incremental analysis, decide which option is the best. Initial Cost Annual Benefit Operations & Maintenance Salvage A B 200,000 275,000 75,000 80,000 25,000 40,000 10,000 45,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
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3) Two investment options are analyzed against each other. They both have an internal rate of return
above the MARR of 10%. They both have lives of 8 years. Using incremental analysis, decide which
option is the best.
Initial Cost
Annual Benefit
Operations &
Maintenance
Salvage
A
200,000
75,000
25,000
40,000
B
275,000
80,000
10,000
45,000
Transcribed Image Text:3) Two investment options are analyzed against each other. They both have an internal rate of return above the MARR of 10%. They both have lives of 8 years. Using incremental analysis, decide which option is the best. Initial Cost Annual Benefit Operations & Maintenance Salvage A 200,000 75,000 25,000 40,000 B 275,000 80,000 10,000 45,000
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