Which alternatives can be eliminated immediately in the first step of incremental rate of return analysis,...

Which alternatives can be eliminated immediately in the first step of incremental rate of return analysis, if MARR = 12.0%?

Which increment should be examined first in incremental rate of return analysis, if MARR = 12.0%?

	Do-nothing	A	B	C	D
First cost	0	$5,500	$3,500	$7,000	$3,500
Annual benefit	0	1,054	765	1,448	545

Life

10 yrs

ROR

14.0%

17.5%

16.0%

9.0%

Life

10 yrs

ROR

13.0%

17.0%

16.0%

10.5%

The answer choices are

B-A

A-B

B-C

A-C

I would rather you show me exactly how to solve the problem rather than just give an answer.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Five alternatives are being evaluated by the incremental rate of return method . Incremental Initial Overall...

Five alternatives are being evaluated by the incremental rate of return method . Incremental Initial Overall ROR Rate of Return Alternative Investment , S versus DN . % A B C D A -25.000 9.6 - 27.3 9.4 35.3 25.0 B 15.1 0 38.5 24.4 C - 40,000 13.4 - 46.5 27.3 D -60,000 25.4 6.8 E -75,000 20.2 - 35.000 If the projects above are independent , the one or ones to select at an MARR of 18 %...

Compare the following 2 alternatives using the incremental rate of return method. Determine which is the...

Compare the following 2 alternatives using the incremental rate of return method. Determine which is the most efficient and which is the most profitable. MARR=8% per year compounded yearly. (Note: For full credit, I want you to compute the actual IRR values) Alter. Construction cost Annual Benefits Salvage Life (yrs) A $1,250,000 $300,000 $12,500 12 B $750,000 $270,000 $10,000 7

In an incremental rate of return analysis, which of the following investment criteria apply (select the...

In an incremental rate of return analysis, which of the following investment criteria apply (select the best answer): If the incremental IRR is greater than or equal to the MARR, retain the higher-cost alternative If the incremental IRR is less than the MARR, retain the lower-cost alternative If the incremental IRR is greater than or equal to the MARR, retain the lower-cost alternative If the incremental IRR is less than the MARR, retain the higher cost alternative Both (a) and...

For the alternatives shown below, determine the incremental rate of return for cash flows for Q...

For the alternatives shown below, determine the incremental rate of return for cash flows for Q – P. Alternative P Alternative Q First cost, $ -50,000 -85,000 Annual operating cost, $ per year -8,600 -2,000 Annual revenue, $ per year 22,000 45,000 Salvage value, $ 3,000 8,000 Life, years 2 3

Consider the following three alternatives. Using incremental IRR analysis, determine which of these projects is the...

Consider the following three alternatives. Using incremental IRR analysis, determine which of these projects is the most desirable. Your MARR is 11%. Each of these projects (A&B) will last for eight years. (2 points) Do nothing A B Capital investment $0 $100 $130 Annual revenues $0 $150 $130.78 Annual costs $0 $123.62 $92

The rate at which a certain drug is eliminated by the body follows first-order kinetics, with...

The rate at which a certain drug is eliminated by the body follows first-order kinetics, with a half life of 77 minutes. Suppose in a particular patient the concentration of this drug in the bloodstream immediately after injection is 1.1microg/ml . What will the concentration be minutes 231 later? Round your answer to 2 significant digits.

a) What is incremental rate of return analysis ΔIRR? b) When is ΔIRR used? c) When...

a) What is incremental rate of return analysis ΔIRR? b) When is ΔIRR used? c) When setting up a ΔIRR analysis, which alternative is the minuend? d) What is the criteria for ΔIRR if borrowing? e) What is the criteria for ΔIRR is investing?

WILL RATE IMMEDIATELY! PLEASE EXAMINE THE PRELIMINARY ANSWERS BELOW AND PROVIDE A STEP BY STEP SOLUTION...

WILL RATE IMMEDIATELY! PLEASE EXAMINE THE PRELIMINARY ANSWERS BELOW AND PROVIDE A STEP BY STEP SOLUTION FOR EACH PROBLEM. If the preliminary answer is incorrect please proceed with the explanation of the correct answer: The NeverLost Company produces and sells popular and widely used portable GPS units for recreational use. Researchers at NeverLost have estimated that the point price elasticity of demand facing the company under current conditions is - 1.2 while the point income elasticity is 2.2 and the...

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

Explain the shortcomings of the IRR(internal rate of return )and PB(the payback). Which alternatives correct for...

Explain the shortcomings of the IRR(internal rate of return )and PB(the payback). Which alternatives correct for these issues? Understanding the major issues with these why are they among the most popular for financial managers to reference?

Subjects