Question

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 the extra $7,000 initial investment. (You can use Excel).

Year	Incremental CFB-CFA
0	-7,000
1	+1,500
2	+1,500
3	+1,500
4	+1,500
5	+5,000

Question 10 options:

	The "Incremental ROR" is more than MARR, so select alternative B.
	Select neither A nor B and go with "DN"
	The "Incremental ROR" is less than MARR, so select alternative A.
	The "Incremental ROR" is more than MARR, so select alternative A.

Answer 1

ANSWER:

7) The correct answer is true as independent projects are selected based on net present worth and the rate of return and do nothing alternative.

10) Using excel the irr is 13.84%

the correct answer is option a that is The "Incremental ROR" is more than MARR, so select alternative B. (13.84% > 12%)