For each of the following scenarios, state whether an incremental ROR analysis is required to select an alternative and state why or why not. Assume that alternative Y requires a larger initial investment than alternative X and that the MARR is 20% per year.
(a) X has a rate of return of 22% per year, and Y has a rate of return of 20% per year.
(b) X has a rate of return of 19% per year, and Y has a rate of return of 21% per year.
(c) X has a rate of return of 16% per year, and Y has a rate of return of 19% per year.
(d) X has a rate of return of 25% per year, and Y has a rate of return of 23%.
(e) X has a rate of return of 20%, and Y has a rate of return of 22% per year.
What will be an ideal response?
(a) Incremental investment analysis is not required. Alternative X should be selected
because the rate of return on the increment is known to be lower than 20%
(b) Incremental investment analysis is not required because only Y has ROR greater
than the MARR
(c) Incremental investment analysis is not required. Neither alternative should be
selected because neither one has a ROR greater than the MARR.
(d) The ROR on the increment is less than 25%, but an incremental investment
analysis
is required to determine if the rate of return on the increment equals or exceeds
MARR = 20%
(e) Incremental investment analysis is not required because it is known that the ROR
on
the increment is greater than 22%. Select Y
You might also like to view...
What is the definition of a distillation column?
a. a cylindrical tower that uses trays or packing to provide a contact point between vapors and liquid to separate the components in a mixture by boiling point. b. a mechanical device designed to accelerate or compress gases. c. a cylindrical tower filled with a porous medium to separate components in a mixture. d. an energy transfer device designed to transfer heat energy between the components in a mixture.
Which of the following materials increases the mortar's workability?
A) Mortar joint profile B) Portland cement C) Lime D) Sand E) All of the above
Describe the techniques used to repair flexible and rigid pavements and their effectiveness for the following treatment types: (a) patching, (b) crack maintenance, and (c) overlays.
What will be an ideal response?
As it passes through the condenser, the refrigerant is:
A) Desuperheated, condensed from a gas to a liquid, and subcooled. B) Condensed from a gas to a liquid, and then subcooled. C) Superheated, condensed from a liquid to a vapor, and then subcooled. D) Condensed from a gas to a liquid, and then superheated.