Homework Answers
Higher cost alternative is selected when incremental IRR >= MARR
Third option is correct answer ie. Greater than or equal to the minimum Accepted rate of return (MARR)
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When comparing two Investment alternatives using Incremental analysis, the higher cost alternative is attractive if the...
When comparing two borrowing alternatives using the l.. Incremental analysis, the higher-cost alternative is accepted If...
When comparing two borrowing alternatives using the l.. Incremental analysis, the higher-cost alternative is accepted If the incremental interestrate is Plea 1v parti ago. webc O greater than the minimum accepted rate of retorn{MARRI Good well less than or equal to the minimum acceptedrale of return (MARR) less than the minimum accepted rate of return (MARRI kel O greater than or equal to the minimum accepted rate of return (MARR) How wou
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)...
A tire manufacturing plant is considering A tire manufacturing plant is considering 2 alternatives for production....
A tire manufacturing plant is considering
A tire manufacturing plant is considering 2 alternatives for production. A minimum attractive (MARR) of 8% is desired. Considering the following, which alternative should be selected? Year Alternative A Alternative B O -$350 -$175 1 $110 +$65 2 $110 +$65 3 $110 +$65 $110 +$65 4 $110 +$65 Choose B since the incremental interest rate is less than the MARR R since the incremental interest rate is greater than the MARR
A tire manufacturing...
Q1: How to use incremental rate of return analysis given two alternatives and choosing which one...
Q1: How to use incremental rate of return analysis given two alternatives and choosing which one is the best? Q2: Case 1: Alternative 1 Alternative 2 Cost 500 700 Annual Cost . 600 800 Annual Benefit 700 . 900 Case 1: Alternative 1 Alternative 2 Cost 700 500 Annual Cost . 800 600 Annual Benefit 900 700 Based on these two cases, how to I apply incremental return analysis to this, and instead of using incremental rate of return...
When comparing two different investment alternatives, which of the following measures for each alternative would be...
When comparing two different investment alternatives, which of the following measures for each alternative would be the best to use? Contribution margin ratio Residual income Return on investment Net income
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 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 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...
When using the Rate of Return Analysis method to choose from mutualy exclusive alternatives, the best...
When using the Rate of Return Analysis method to choose from mutualy exclusive alternatives, the best alternative is 1. The alternative with the highest present worth of benefits 2. The alternative with the highest PIA factor 3. The alternative with the highest IRR 4. Any alternative that is greater than the MARR is equally desirable 5. None of these answers is correct
A factory is considering two investment alternatives to replace the equipment in one of its areas...
A factory is considering two investment alternatives to replace the equipment in one of its areas of production, given the existing equipment is vastly deteriorated. Proyect A Proyect B Cost of Equipment $82,000 $94,000 Expected Annual Savings $18,100 $16,500 Residual Value $21,400 $22,850 Useful Life (years) 10 10 Annual maintenance costs are presumed identical for both alternatives. The company is going to make one of the investments, which is why not doing anything is not considered a viable alternative. The...
1) Consider these two machines (alternatives): (12 Points) B A $5000 $1750 $700 $8200 $1850 $500...
1) Consider these two machines (alternatives): (12 Points) B A $5000 $1750 $700 $8200 $1850 $500 First Cost Uniform annual benefit Salvage Value Useful Life, in Years 4 If the MARR (minimum attractive rate of return) -7 % , which alternative should be selected? Use the Present worth Analysis method.
1) Consider these two machines (alternatives): (12 Points) B A $5000 $1750 $700 $8200 $1850 $500 First Cost Uniform annual benefit Salvage Value Useful Life, in Years 4 If the...
When comparing two borrowing alternatives using the l.. Incremental analysis, the higher-cost alternative is accepted If the incremental interestrate is Plea 1v parti ago. webc O greater than the minimum accepted rate of retorn{MARRI Good well less than or equal to the minimum acceptedrale of return (MARR) less than the minimum accepted rate of return (MARRI kel O greater than or equal to the minimum accepted rate of return (MARR) How wou
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)...
A tire manufacturing plant is considering
A tire manufacturing plant is considering 2 alternatives for production. A minimum attractive (MARR) of 8% is desired. Considering the following, which alternative should be selected? Year Alternative A Alternative B O -$350 -$175 1 $110 +$65 2 $110 +$65 3 $110 +$65 $110 +$65 4 $110 +$65 Choose B since the incremental interest rate is less than the MARR R since the incremental interest rate is greater than the MARR
A tire manufacturing...
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 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...
When using the Rate of Return Analysis method to choose from mutualy exclusive alternatives, the best alternative is 1. The alternative with the highest present worth of benefits 2. The alternative with the highest PIA factor 3. The alternative with the highest IRR 4. Any alternative that is greater than the MARR is equally desirable 5. None of these answers is correct
1) Consider these two machines (alternatives): (12 Points) B A $5000 $1750 $700 $8200 $1850 $500 First Cost Uniform annual benefit Salvage Value Useful Life, in Years 4 If the MARR (minimum attractive rate of return) -7 % , which alternative should be selected? Use the Present worth Analysis method.
1) Consider these two machines (alternatives): (12 Points) B A $5000 $1750 $700 $8200 $1850 $500 First Cost Uniform annual benefit Salvage Value Useful Life, in Years 4 If the...
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