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Of 2 projects, Project A has the higher annual maintenance cost while Project B has a higher initial equipment cost, both with similar lifetimes.

 Of 2 projects, Project A has the higher annual maintenance cost while Project B has a higher initial equipment cost, both with similar lifetimes.The rate of return for Project A (high maintenance) is 35%, while the rate of return for Project B (higher equipment cost) is 40%. The incremental rate of return between the two projects is calculated to be 17.6%. If your company has an MARR of 20%, which alternative is preferred? Explain your reasononing on your Worksheet.



Project A


Project B


Neither - Do Nothing


Choose Both projects

Top Answer

Both should be preferred since... View the full answer

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