Consider the two mutually exclusive alternatives

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Consider the following two mutually exclusive alternatives (do not consider the “Do Nothing” alternative). Each alternative has a 10-year useful life. If the MARR is 10.0%, which alternative should be selected? Answer in terms of incremental rate of return analysis

Cash Flow                       A                     B                 B – A

Initial cost                (–$60,000)      (–$90,000)     (–$30,000)

EUAB                         $10,000           $15,000           $5,000

Salvage                        $ 8,000            $ 6,000 (- $2,000)

Reference no: EM131881025

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