Alternatives a and b require investments of 10310 and 13400


Alternatives A and B require investments of $10,310 and $13,400, respectively. Their respective net annual cash inflows are $3,300 and $4,000. What is the rate of return for each alternative and for the incremental difference? If the interest rate is 10%, which alternative should be selected? Use a 6-year time horizon.

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Financial Management: Alternatives a and b require investments of 10310 and 13400
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