Question No. r The following information is provided for five mutually exclusive alternatives that have 20-year useful lives. If the minimum attractive rate of return is 6%, which alternative should be selected using IROR Method? Alternatives A D Cost 4,000 2,000 6,000 1,000 9,000 Uniform Annual Benefit 639 410 761 117 785 IROR 15% 20% 11% 10% 6% IROR (B-D) IROR (A-D) IROR (A-B) IROR (C-B) IROR (C-A) IROR (E-C) IROR (E-A) 29% 18% 10% 9% 2% 14% -5%

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Question No. r
The following information is provided for five mutually exclusive alternatives that have 20-year
useful lives. If the minimum attractive rate of return is 6%, which alternative should be selected
using IROR Method?
Alternatives
B
Cost
4,000
2,000
6,000
1,000 9,000
Uniform Annual Benefit
639
410
761
117
785
IROR
15%
20%
11%
10%
6%
IROR (B-D)
IROR (A-D)
IROR (A-B)
IROR (C-B) IROR (C-A) IROR (E-C)
IROR (E-A)
-5%
29%
18%
10%
9%
2%
14%
Transcribed Image Text:Question No. r The following information is provided for five mutually exclusive alternatives that have 20-year useful lives. If the minimum attractive rate of return is 6%, which alternative should be selected using IROR Method? Alternatives B Cost 4,000 2,000 6,000 1,000 9,000 Uniform Annual Benefit 639 410 761 117 785 IROR 15% 20% 11% 10% 6% IROR (B-D) IROR (A-D) IROR (A-B) IROR (C-B) IROR (C-A) IROR (E-C) IROR (E-A) -5% 29% 18% 10% 9% 2% 14%
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