Question

In: Economics

Define Incremental Analysis in the evaluation of ROR, and give an example (other than the examples...

Define Incremental Analysis in the evaluation of ROR, and give an example (other than the examples in the slides or the

Solutions

Expert Solution

If applied to the selection of service producing investments , the ROR will be infinite. This is because we are considering only costs ( negative cash) and not any revenue ( positive cash ) .

In the case of evaluation of Rate of Return, incremental analysis refers to the analysis performed in order to avoid the problem of ROR. The costs of one alternative are subtracted from the costs of other alternative, the difference of the two costs will give us savings ( positive or negative). The ROR analysis are performed on these incremental costs.lf incremental ROR is greater than the minimum acceptable ROR , select the initial cost alternative and vice versa.

Example


Related Solutions

Given the following 4 alternatives, the best alternative using the incremental ROR analysis at MARR= 13%...
Given the following 4 alternatives, the best alternative using the incremental ROR analysis at MARR= 13% is: Dealer 1 2 3 4 First Cost, $ -5,000 -6,500 -10,000 -15,000 Annual Average Cost per repair, $ -3500 -3200 -3000 -2000 Close-out value, $ +500 +900 +700 +1000 Life, years 8 8 8 8 Group of answer choices Alt. 1 Alt. 2 Alt. 3 Alt. 4
Give three examples of Clinical outcome measures that could be used in Economic evaluation analysis, and...
Give three examples of Clinical outcome measures that could be used in Economic evaluation analysis, and discuss the context in which each could be used to assess the health benefits or impact of an appropriate intervention or Technology for health, including the use of medicines.
46. Give an example of a summative evaluation 47. What is a situation analysis? SWOT stands...
46. Give an example of a summative evaluation 47. What is a situation analysis? SWOT stands for ____________ 48. What is social marketing? 49. What are the 4 Ps in marketing? 50. What are the different ways for market segmentation?
Give an example other than a source of praise of something that could be an extrinsic...
Give an example other than a source of praise of something that could be an extrinsic source of self-esteem for AN ADULT and then give an example of something that could be an intrinsic source.
A) Define Retaliatory Eviction. Give an example. B) Define Constructive Eviction. Give an example.
A) Define Retaliatory Eviction. Give an example. B) Define Constructive Eviction. Give an example.
Define, give examples, and discuss the role of several instances in supporting arguments. Define, give examples,...
Define, give examples, and discuss the role of several instances in supporting arguments. Define, give examples, and discuss the role of statistics in supporting arguments.
Give an example of a three-level "Is-A" hierarchy and a three-level "Has-A" hierarchy other than the...
Give an example of a three-level "Is-A" hierarchy and a three-level "Has-A" hierarchy other than the ones discussed in the lecture. Just provide as many examples as you can, thank you
give two examples in any area of interest to you (other than those already presented in...
give two examples in any area of interest to you (other than those already presented in this chapter) where regression analysis can be used as a data analytic tool to answer some questions of interest. For each example: a. what is the question of interest? b. Identify the response and the predictor variable. c. Classify each of the variables as either quantitative or qualitative. d. Which type of regression (see table 1.15) can be used to analyze the data? e....
Give examples of five (unique) instances when you will need (demand) a currency other than the...
Give examples of five (unique) instances when you will need (demand) a currency other than the US dollar. Does this demand for the other currency automatically mean supply of dollars? Explain.
Define and give an example Empty calories
Define and give an example Empty calories
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT