Question

1. Which alternative of the three alternatives below should be selected if the MARR = 6%? Use the following to compare projects:

1. PW analysis
2. B/C ratio for each project
3. Incremental B/C ratio assessment
4. IRR for each project over its respective service life
5. Incremental IRR using the same (a common) number of years for each project

Are any of the projects acceptable? Are any not acceptable? Which project would you recommend and why?

Alternatives:                             A                     B                      C

First Cost                                  $800                 $300                 $150

Uniform Annual Benefit            $142                 $60                  $33.5

Service Life                              4 years             5 years             10 years

Answer 1