Case Study 8
the Cash Flows for Three Mutually Exclusive

Case Study 8
The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%.
$$\begin{array} { | l | l | l | l | } \hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } \\\hline \text { Initial cost } & \$ 15,000 & 27,000 & 24,000 \\\hline \text { Annual benefits } & \$ 4,500 & 7,600 & 6,500 \\\hline \text { RoR } & 15 \% & 13 \% & 11 \% \\\hline \text { Life in years } & & { 5 } \\\hline\end{array}$$
-Determine the ?RoR for the second increment (Alt. B - Alt.A) if A was retained during the first incremental analysis. ___________________.

A) 10.85%
B) 8.12%
C) 9.19%
D) 5.78%

Correct Answer:

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