ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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For this problem, consider the five mutually exclusive investment alternatives, A through E, with
incremental analysis. Do nothing is not an alternative.
|A
C
Capital
$55,000
$90,000
$45,000
$30,000
$70,000
investment
Annual
$30,000
$40,000
$25,000
$15,000
$35,000
expenses
Annual
$50,000
$52,000
$38,000
$29,000
$45,000
revenues
Market value at
$10,000
$15,000
$10,000
$11,000
$15,000
ΕΟΥ 10
IRR
???
7.4%
26.7%
46.0%
9.2%
Useful Life in
10
|10
10
10
10
years
When applying incremental analysis, the base alternative is identified, and then the first incremental
comparison should be which of the following? Assume the MARR=10%.
Choose the correct answer below. The first letter is the base alternative and the second letter is the
next alternative in the analysis.
A. D - C
В. Е - D
C. E - A
D. D - B
E. D - A
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Transcribed Image Text:For this problem, consider the five mutually exclusive investment alternatives, A through E, with incremental analysis. Do nothing is not an alternative. |A C Capital $55,000 $90,000 $45,000 $30,000 $70,000 investment Annual $30,000 $40,000 $25,000 $15,000 $35,000 expenses Annual $50,000 $52,000 $38,000 $29,000 $45,000 revenues Market value at $10,000 $15,000 $10,000 $11,000 $15,000 ΕΟΥ 10 IRR ??? 7.4% 26.7% 46.0% 9.2% Useful Life in 10 |10 10 10 10 years When applying incremental analysis, the base alternative is identified, and then the first incremental comparison should be which of the following? Assume the MARR=10%. Choose the correct answer below. The first letter is the base alternative and the second letter is the next alternative in the analysis. A. D - C В. Е - D C. E - A D. D - B E. D - A
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