ACME is considering a purchase of a new production line with 5 years of expected life. The management is going to consider 4 proposals and set its MARR to 12%. Useincremental analysisto evaluate the alternatives from the data displayed in a table below. Which alternative should be selected using the IRR and PW methods with incremental analysis? (Hint: Make sure you arrange the alternatives in the correct order before the analysis).
Proposal 1
Proposal 2
Proposal 3
Proposal 4
Capital investment
$22,000
$27,500
$24,000
$28,500
Net annual income
$5,000
$7,700
$6,000
$8,150
Market value
$8,000
$9,500
$9,000
$10,000
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