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.
(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 type of units are required by the EPA to have service valves?
A) Types I, II, and III B) Type I only C) Type II only D) Type II and Type III
Prescriptive-type tables for use in project specifications have been developed by the _____
a. American Cement Specification Board b. American Concrete Institute c. American Concrete Council d. American Cement Manufacturers' Association
When an object has a uniform shape and thickness, more than one view is normally unnecessary.
Answer the following statement true (T) or false (F)
A machined piece of steel is in the shape of a cylinder. There are two parallel holes drilled through the cylinder on the circumference. Which of the following is (are) true?
A. A revolved or removed section is the best application for sectioning this object. B. A section line is not necessary since the location of that line is obvious when the cylinder is viewed in section. C. Cutting plane lines are used in the view of the section of the cylinder to show where the cylinder has been cut. D. both b and c E. none of the above