This question is based on the following five alternatives that are evaluated by the rate of return method.
 FIGURE 1.png)
Jewel-Osco evaluated three different pay-by-touch systems that identify a customer by a finger scan and automatically deduct the amount of the bill directly from their checking account. The revenue alternatives were ranked according to increasing initial investment and identified as alternatives A, B, and C.
 figure 2.png)
Rank alternatives in terms of increasing first cost: DN, A, B, C
Eliminate alternative B because i* < MARR =16%
A to DN: i* = 23.4% i* > MARR eliminate DN
C vs. A: ?i* = 12.0% ?i* < MARR eliminate C; select A
Answer is (a) A
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