Calculate the incremental irr for system investment

Reference no: EM132176384

Question - Two locations of Hare Salads Restaurants are evaluated, with the projected life of each facility being 10 years. The cash flows are as follows

Alternative	A	B
First Cost	$260,000	$205,000
Maintenance & Operat8ing Costs	$41,000	$46,000
Annual Value	$80,000	$75,000
Salvage Value	$25,000	$22,000
Projected life	10	10

The company uses a MARR of 10%. Using rate of return analysis, which alterative should be selected?

a) List the table of Incremental Cash Flow based on the two alternatives.

b) Calculate the Incremental IRR for system investment.

Reference no: EM132176384

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