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5. There are four mutually exclusive equipment alternatives being considered. The estimated cash flows for each alternative are shown below: Description D Capital investment Annual costs Annual revenues Market value at end of useful life Useful life IRR Alternative A $22,000 $7,000 $14,000 $4,000 4 years 15.6% Alternative B B $26,200 $7,500 $15,000 $5,000 10 years 26.3% Alternative Alternative C $17,000 $31,000 $5,800 $9,400 $12,000 $18,000 $3,500 $5,500 5 years 10 years 27.2% 25% The firm's MARR is 25% per year. Which of the four alternatives, if any, should be adopted, on the basis of an Incremental IRR analysis? (3.5 marks) 5. There are four mutually exclusive equipment alternatives being considered. The estimated cash flows for each alternative are shown below: Description D Capital investment Annual costs Annual revenues Market value at end of useful life Useful life IRR Alternative A $22,000 $7,000 $14,000 $4,000 4 years 15.6% Alternative B B $26,200 $7,500 $15,000 $5,000 10 years 26.3% Alternative Alternative C $17,000 $31,000 $5,800 $9,400 $12,000 $18,000 $3,500 $5,500 5 years 10 years 27.2% 25% The firm's MARR is 25% per year. Which of the four alternatives, if any, should be adopted, on the basis of an Incremental IRR analysis? (3.5 marks)

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