This question is based on the following five alternatives that are evaluated by the rate of return method.
 FIGURE 1.png)
If the alternatives are mutually exclusive and the MARR is 15% per year, the alternative to select is:
(a) Either B, D, or E
(b) Only B
(c) Only D
(d) Only E
Rank alternatives in terms of increasing first cost: DN, A, B, C, D, E
Eliminate alternatives A and C because i* < MARR =15%
B to DN: i* = 15.1% i* > MARR eliminate DN
D to B: ?i* = 38.5% ?i* > MARR eliminate B
E to D: ?i* = 26.8% ?i* > MARR eliminate D; select E
Answer is (d) Only E
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