Homework Answers
1)
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It is the purpose and objective to calculate the incremental analysis to identify the best alternative.
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Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents ...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be prepared over the LCM of their lives. True False Question 3 (1 point) In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct an "Incremental ROR"in order to obtain the same ranking as the PW and AW methods True False Question 7 (1 point) When an incremental rate of return analysis is conducted correctly, the alternative identified...
Question 7 (1 point) In evaluating independent projects, no incremental analysis is necessary between projects. Each...
Question 7 (1 point) In evaluating independent projects, no incremental analysis is necessary between projects. Each project is evaluated separately from others, and more than one project can be selected. Therefore, the only comparison is with the do-nothing alternative for each project. Question 7 options: True False 10. Given the following time events and incremental cash flow, if the MARR is 12% per year, which alternative should be selected on the basis of rate of return? Assume alternative B requires...
Question 9 (4 points) When the cash flow of the shemative with the lower In v...
Question 9 (4 points) When the cash flow of the shemative with the lower In v estment is subtracted from that with the ligherita Investment, a rate of return on the Incremental cash flow that equals or exceeds the MARR means the lower Initi Investment alternative is the more attractive True False Question 10 (4 points) In the incremental ROR analysis for multiple mutually exclusive Nternatives. If the Increme ROR is equal or exceed the MARR, the Challenger selected and...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A and B, are to be evaluated by the rate of return (ROR) method. The initial Investment for alternative B is greater than that of alternative A. If the overall ROR of alternative A is less than the MARR and the overall rate of return of alternative B is greater than the MARR, then: A) Alternative B should be compared incrementally to alternative A. B)...
**The four revenue alternatives described below are being evaluated by the rate of return method. If...
**The four revenue alternatives described below are being evaluated by the rate of return method. If the alternatives are mutually exclusive, which one(s) should be selected when the MARR is 17% per year? Incremental Rate of Return (%) When compared with Alternative Alternative A Initial Investment ($) Overall Rate of Return i(%) -80,000 -110,000 -150,000 -230,000 Select only alternative D Select only alternative B Select only alternative C Select alternatives A, B, C, and D
1. True or False. When we use the Rate of Return Method in evaluating more than...
1. True or False. When we use the Rate of Return Method in evaluating more than one alternative, we cannot compare the IRR of mutually exclusive alternatives (or IRR of the differences between mutually exclusive alternatives) against those of other alternatives. Explain your answer.
The four alternatives described below are evaluated by the rate of return method. Alternative Initial Investment, $ Ove...
The four alternatives described below are evaluated by the rate of return method. Alternative Initial Investment, $ Overall ROR, i*% Δi*% When Compared with Alternative A B C A −40,000 29 - - - B −75,000 15 1 - - C −100,000 16 7 20 - D −200,000 14 10 13 12 If the proposals are mutually exclusive, which one should be selected at an MARR of 9% per year? Alternative should be selected.
Question 3 10 pts Which alternative should be selected using incremental rate of return analysis, if...
Question 3 10 pts Which alternative should be selected using incremental rate of return analysis, if MARR = 10.5%? B C D $3,500 $9,000 $3,000 738 1,793 1467 JO Do-nothing A First costo $9,000 Annual 1,626 benefit Life 10 yrs 12.5% ROR 16.5% 15.0% 0.0% OB, because its ROR is the highest something other than C, because C costs the most initially OC because C has the highest annual benefit OC, because the C-B increment has a ROR of 14.03%...
There are six mutually exclusive investments alternatives. And investor can select one of them or non...
There are six mutually exclusive investments alternatives. And
investor can select one of them or non .the following analysis
table shows incremental internal rate of return for each two
alternatives
(2.5 points) There are six mutually exclusive investment alternatives. An investor can select one of them or none. The following analysis table shows incremental internal rate of retum for each two altematives. (e-t. incremental internal rate of retum of Δ(B-A)-8%], which alternative should he select if MAR-12% Do Nothing A...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be prepared over the LCM of their lives. True False Question 3 (1 point) In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct an "Incremental ROR"in order to obtain the same ranking as the PW and AW methods True False Question 7 (1 point) When an incremental rate of return analysis is conducted correctly, the alternative identified...
Question 9 (4 points) When the cash flow of the shemative with the lower In v estment is subtracted from that with the ligherita Investment, a rate of return on the Incremental cash flow that equals or exceeds the MARR means the lower Initi Investment alternative is the more attractive True False Question 10 (4 points) In the incremental ROR analysis for multiple mutually exclusive Nternatives. If the Increme ROR is equal or exceed the MARR, the Challenger selected and...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A and B, are to be evaluated by the rate of return (ROR) method. The initial Investment for alternative B is greater than that of alternative A. If the overall ROR of alternative A is less than the MARR and the overall rate of return of alternative B is greater than the MARR, then: A) Alternative B should be compared incrementally to alternative A. B)...
**The four revenue alternatives described below are being evaluated by the rate of return method. If the alternatives are mutually exclusive, which one(s) should be selected when the MARR is 17% per year? Incremental Rate of Return (%) When compared with Alternative Alternative A Initial Investment ($) Overall Rate of Return i(%) -80,000 -110,000 -150,000 -230,000 Select only alternative D Select only alternative B Select only alternative C Select alternatives A, B, C, and D
1. True or False. When we use the Rate of Return Method in evaluating more than one alternative, we cannot compare the IRR of mutually exclusive alternatives (or IRR of the differences between mutually exclusive alternatives) against those of other alternatives. Explain your answer.
Question 3 10 pts Which alternative should be selected using incremental rate of return analysis, if MARR = 10.5%? B C D $3,500 $9,000 $3,000 738 1,793 1467 JO Do-nothing A First costo $9,000 Annual 1,626 benefit Life 10 yrs 12.5% ROR 16.5% 15.0% 0.0% OB, because its ROR is the highest something other than C, because C costs the most initially OC because C has the highest annual benefit OC, because the C-B increment has a ROR of 14.03%...
There are six mutually exclusive investments alternatives. And
investor can select one of them or non .the following analysis
table shows incremental internal rate of return for each two
alternatives
(2.5 points) There are six mutually exclusive investment alternatives. An investor can select one of them or none. The following analysis table shows incremental internal rate of retum for each two altematives. (e-t. incremental internal rate of retum of Δ(B-A)-8%], which alternative should he select if MAR-12% Do Nothing A...
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