Problem 5 (20pts)
Consider two investments with the following cash flows:
n
Project A
Project B
0
-100,000
-190,000
1
19,000
29,000
2
17,000
27,000
3
15,000
25,000
4
12,000
22,000
5
22,000
32,000
6
100,000
195,000
Suppose A and B are mutually exclusive, the
MARR is 12%, the rate of return for project A and B is already
given, which is 15% and 13% respectively.
Determine which project should be selected using rate of
return on incremental investment. In...