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14 December, 03:15

A company is considering two alternatives, one of which must be implemented. Of the two projects, A has the higher maintenance cost, but B has the higher investment cost. The appropriate (and properly calculated) incremental IRR is 17.6%. Which alternative is preferred if the Minimum Attractive Rate of Return is 20%.

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  1. 14 December, 06:47
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    The company will choose A

    Explanation:

    Since the incremental IRR (A-B) = 17.6% and MARR=20%, this indicates IRR is less then MARR (IRR
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Home » Business » A company is considering two alternatives, one of which must be implemented. Of the two projects, A has the higher maintenance cost, but B has the higher investment cost. The appropriate (and properly calculated) incremental IRR is 17.6%.
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