The estimated negative cash flows for three design alternatives are shown below. The MARR is 14% per year and the study period is five years. Which alternative is best based
on the IRR method? Doing nothing is not an option.
Capital
investment
ΕΟΥ
0
A
$84,700
Alternative
B
$65,600
C
$74,200
Annual expenses
1-5
8,100
13,400
10,850
Which alternative would you choose as a base one? Choose the correct answer below.
A. Alternative C
B. Alternative B
OC. Alternative A