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A firm is considering two mutually exclusive alternatives as part of an upgrade to its...

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Accounting

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A firm is considering two mutually exclusive alternatives as part of an upgrade to its supply chain management system. The cash flow information is presented in the table below. Based on a 20-year study period and 10% MARR, use the incremental IRR method to determine which alternative is the most economical. Installation cost Net annual revenue Salvage value Useful life Calculated IRR 80000 100000 12500 15000 0 20 years 20 years 14.6% 13.9% 0 1) Which alternative should be used as the base scenario for the calculation? 2) What is the incremental IRR of the delta cash flow? (Please keep one decimal place and only enter the numbers. e.g. if your answer is 15.37%, please enter 15.4) 3) Which alternative should be selected

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