Question

Compare the alternatives using IRR (internal rate of return) method. MARR is 11% per year. Alternative...

Compare the alternatives using IRR (internal rate of return) method. MARR is 11% per year.

Alternative 1

Alternative 2

First cost

176360

268330

Annual revenue

23960

19450

Salvage value

22310

30240

Life, years

∞

∞

in excel please!!

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Homework Answers

Answer #1

Refer the attached picture below

The salvage value is of no use as the time period is infinite.

Alternative A will be preferred over B.

Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me, please help. Thank you.

fx =RATE(500, BW4 , BW3 ,0) BT BU BV BW BX F 2 A(B-A) -91970 3 4 A B Investment -176360 -268330 AOC -23960 -19450 Salvage Value 22310 30240 Incremental IRR 4510 5 7930 4.90% 6

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