What is the incremental irr between the potential projects

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Reference no: EM131797501

Question: A technologist has narrowed her choice of robots to work on a hazardous material project. She must choose either the HAL or the IBM or not do the project. The HAL robot can be purchased for $110,000 and will generate $21,000 of revenue whereas for the IBM robot, the numbers are $60,000 and $12,000, respectively. Each robot has an 8 year useful life and the same maintenance costs (very small) but because of hazardous waste contamination, neither robot has a salvage value. The MARR is 6%.

a) What is the incremental IRR between these two potential projects?

b) If the MARR is 6%, which robot (if any) should be purchased?

Reference no: EM131797501

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