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%.
$$\begin{array} { | l | l | l | l | } \hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } \\\hline \text { Initial cost } & \$ 15,000 & 27,000 & 24,000 \\\hline \text { Annual benefits } & \$ 4,500 & 7,600 & 6,500 \\\hline \text { RoR } & 15 \% & 13 \% & 11 \% \\\hline \text { Life in years } & & { 5 } \\\hline\end{array}$$
-The best alternative for a MARR of 4.0% using the incremental rate of return analysis is ____________.

A) Alt. C
B) Alt. A
C) Alt. B
D) Do nothing

Correct Answer:

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