Two projects are being considered and are mutually exclusive. Both have lives of 5 years. Project A has a first cost of

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

Two projects are being considered and are mutually exclusive. Both have lives of 5 years. Project A has a first cost of

Post by answerhappygod »

Two projects are being considered and are mutually exclusive.
Both have lives of 5 years. Project A has a first cost of $2,500
and annual benefits of $746. Project B has a first cost of
$5,000 and annual benefits of $1464. Assume the MAR is 8.000% and
use an incremental RoR analysis.
What should be selected?
What is the incremental rate of return between the projects (to 3
decimal places like 8.145% or 12.671%)?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply