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Business, 12.11.2019 22:31 ajaydonlee

Given the following time events and incremental cash flow, if the marr is 12% per year, which alternative should be selected on the basis of rate of return? assume machine b requires the extra $8,000 initial investment. (you can use excel).

year incremental year cash flow $(machine b-a)
0 -8,000
1 - 4 1,000
5 - 7 2,500
8 6,000

select neither a nor b and go with dn

(a) the "incremental ror" is less than marr, so select machine b
(b) the "incremental ror" is more than marr, so select machine b
(c) the "incremental ror" is less than marr, so select machine a

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Answers: 3

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Given the following time events and incremental cash flow, if the marr is 12% per year, which altern...

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