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Which alternative is best if the minimum attractive rate

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Reference no: EM13882046

The plant manager at Automaton Robotics is looking at the summarized incremental rate of return information shown below for fi ve mutually exclusive alternatives, one of which must be chosen. The table includes the overall ROR and the incremental comparison of alternatives. Which alternative is best if the minimum attractive rate of return is ( a ) 15% per year and ( b ) 12% per year?

Incremental Rate of Return, %

Alternative

First Cost, $

Overall ROR, %

A

B

C

D

E

A

-80,000

14

-

12

11

17

24

B

-60,000

16

12

-

14

23

21

C

-40,000

17

11

14

-

35

29

D

-30,000

12

17

23

35

-

17

E

-20,000

8

24

21

29

17

-

Reference no: EM13882046

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