Five alternatives are being evaluated by the incrementalrate of return method.IncrementalRate of Return, %InitialOverall RORAlternative Investment, $ versus DN, % ABD- 25,000- 35,000- 40,000-60,000-75,0009.627.3 9.4 35.3 25.0В15.138.5 24.413.446.5 27.3-25.46.820.2(SO2PI1) If the projects above are mutually exclusive and the MARR is 5% per year, the best alternative isSelect one:O a. EO b. AO c.Dd. BABCDE

The IRR (internal rate of return ) and the MARR (minimum acceptable rate of return) means the rates…

Five alternatives are being evaluated by the incremental rate of return method. Incremental Rate of Return, % Overall ROR Alternative Investment, $ versus DN, % A Initial CD E - 25,000 -35,000 -40,000 -60,000 9.6 27.3 9.4 35.3 25.0 15.1 38.5 24.4 - 13.4 46.5 27.3 25.4 6.8 -75,000 20.2 O2PI1) If the projects above are mutually exclusive and the MARR is 5% per year, the best alternative is elect one: O a. E Ob.A Oc. D d. B ABCDE

Five alternatives are being evaluated by the incremental rate of return method. Incremental Rate of Return, % Overall ROR Alternative Investment, $ versus DN, % A Initial CD E - 25,000 -35,000 -40,000 -60,000 9.6 27.3 9.4 35.3 25.0 15.1 38.5 24.4 - 13.4 46.5 27.3 25.4 6.8 -75,000 20.2 O2PI1) If the projects above are mutually exclusive and the MARR is 5% per year, the best alternative is elect one: O a. E Ob.A Oc. D d. B ABCDE

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 8P

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Five alternatives are being evaluated by the incremental rate of return method. Incremental Rate of Return, % Initial Overall ROR Alternative Investment, $ versus DN, % A B C D E -25,000 -35,000 -40,000 -60,000 -75,000 A 9.6 27.3 9.4 35.3 25.0 15.1 38.5 24.4 C 13.4 46.5 27.3 D 25.4 6.8 E 20.2 (SO2PI1) If the projects above are mutually exclusive and the MARR is 20% per year, the best alternative is Select one: О а. В O b. C O c. D O d. E
Five alternatives are being evaluated by the incremental rate of return method. Incremental Rate of Return, % Initial Alternative Investment, $ versus DN, % A Overall ROR B CDE A 9.6 27.3 9.4 35.3 25.0 -25,000 -35,000 -40,000 -60,000 38.5 24.4 46.5 27.3 B. 15.1 - C 13.4 - D 25.4 6.8 - 75,000 20.2 (SO2PI1) If the projects above are mutually exclusive and the MARR is 20% per year, the best alternative is Select one: O a B ObC OcD OdE
The five alternatives shown below are being evaluated by the rate of return method. Incremental ROR when compared with alternative B C D 27.3 9.4 35.3 25 E 1.5 38.5 24.4 Alt B D E Initial Invest, $ ROR vs DN,% 9.6 15.1 -25,000 -35,000 -40,000 -60,000 -75,000 13.4 25.4 20.2 A --- --- (d) Alt D 46.5 27.3 6.8 ... If the projects are mutually exclusive and the Minimum Attractive Rate of Return is 9.2% per year, the best alternative is: (a) Alt A (b) Alt B (c) Alt C (e) Alt E
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The five alternatives shown here are being evaluated by the rate of return method: If the alternatives are independentand the MARR is 17% per year, which alternative(s) should be selected? A D E Initial Investment ($) -25,000 -35,000 -40,000 -60,000 -75,000 i% (ROR versus DN) 9.6% 17.1% 13.4% 27.4% 22.2% O a. A and C O b. O C. All of them O d. B. D, andE Incremental cash flow = cash flowB – cash flowA. where larger initial investment is EN al!
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