The incremental rate of have the same rate ofretum of20% each. return is 10%. If MARR...
Either of the cost alternatives shown below can be used in a chemical refining process. If the company’s MARR is 15% per year, determine which should be selected on the basis of an incremental ROR analysis. A B First cost ,$ − 40,000 − 61,000 Annual cost, $/year − 25,000 − 19,000 Salvage value, $ 8,000 11,000 Life, years 5 5 5 - A. B. C. D. E. F. The incremental rate of return computed using a present worth analysis...
MARR is 5% what is the incremental rate and what alternative should be chosen. YEAR A B 0 -10000 -15000 1-5 3200 4500
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%...
Consider four alternatives, each of which has an 8-year useful life: A B C D Initial cost $100 $80 $60 $50 Annual benefit $12.20 $12.00 $9.70 $12.20 Salvage Value $75.00 $50.00 $50.00 $0 a) Construct a plot with interest rate on the x axis and PW on the y axis. Plot the PW vs interest rate for all 4 alternatives. Label graphs and make sure the fonts are readable. If your computer chooses very light colors,...
1. Given the costs and benefits of two water pumps, what is the rate of return on the difference of these alternatives? Year -$3000 +800 +800 +800 +800 +800 -$3800 +1200 +1200 +1200 +1200 +1200 What is your choice of these 2 alternatives and why? 2. The manager of a local restaurant is trying to decide whether to buy a charcoal broiling unit or an electric grill for cooking hamburgers. A market study shows customers prefer charcoal broiling but the...
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...
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...
The key question answered by incremental analysis is: a. Does the lowest cost alternative have an IRR MARR? b. Is the IRR earned on the additional cost> MARR? c. Which alternative has the highest IRR? d. Does each alternative have an IRR MARR?
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...
how do you find the incremental IRR?
You are the President of AMT Enterprises. You have the opportunity to expand your product line to include a new semi-conductor wafer fabrication line. In order to produce the new wafer, you must invest in a new production process. In addition to doing nothing (DN), two mutually exclusive processes are currently available to produce the wafer. Should you produce this new wafer? In other words, which, if either, of the alternative processes should...