The PW-based relation for the incremental cash flow series to find ?i* between the lower first- cost alternative X and alternative Y has been developed. 0 = ? 40,000 + 9000(P?A,?i*,10) ? 2000(P?F,?i*,10) Determine the highest MARR value for which Y is preferred over X. Write the single-cell spreadsheet function that displays ?i*.

What will be an ideal response?


Solve for ?i* by trial and error or spreadsheet
?i* = 18.0% per year
Any MARR value greater than 18% favors X
Function: = RATE(10,9000,-40000,-2000) displays 18.05%

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