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As a project engineer, you are in charge of reviewing five different investment projects. In order...

As a project engineer, you are in charge of reviewing five different investment projects. In order to best determine which investment project is "best" for your company, you have already taken the proper steps to determine the rate of return on the incremental investment. A summary of your work has been shown below.

Investment Alternative  Initial Investment ($)  Rate of Return (%)  Rate of Return on Increm Investment (%)

                                                                                                                          A      B     C     D     E   

A                                             35,000                       12                                       28    20   36    27

B                                             45,000                       15                                            12   40    22

C                                             50,000                       13                                                       42    25

D                                             65,000                       20                                                                  -5

E                                              80,000                      18


If all investment alternatives are mutually exclusive and the MARR is 12%, which alternative should be chosen?

a.

Select D.
b.

Select E.
c.

Select B.
d.

Do nothing.
business   Operations-Management   
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