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Two alternatives X and Y are evaluated against a MARR of 15% per year by the ROR method. Alternative X requires a $20,000 initial investment. Alternative Y requires a $25,000 investment. The i* values are i * X= 19% and i * Y= 17% per year. a) Under what circumstance is alternative Y the preferred choice? Write the number on the line below. (5 points) 1) Alternative X is preferred if the rate of return on the increment of investment between X and Y is MARR. 2) Alternative Y is preferred if the rate of return on the increment of investment between X and Y is 0. 3) Alternative X is preferred if the rate of return on the increment of investment between X and Y is 0. 4) Alternative Y is preferred if the rate of return on the increment of investment between X and Y is MARR. Answer: b) Explain your answer. Write your explanation as a short paragraph

Two alternatives X and Y are evaluated against a MARR of 15% per year by the ROR method. Alternative X requires a $20,000 initial investment. Alternative Y requires a $25,000 investment. The i values are ix=19% and iY=17% per year. a) Under what circumstance is alternative Y the preferred choice? Write the number on the line below. (5 points) 1) Alternative X is preferred if the rate of return on the increment of investment between X and Y is MARR. 2) Alternative Y is preferred if the rate of return on the increment of investment between X and Y is 0. 3) Alternative X is preferred if the rate of return on the increment of investment between X and Y is 0. 4) Alternative Y is preferred if the rate of return on the increment of investment between X and Y is MARR. Answer: b) Explain your answer. Write your explanation as a short paragraph. Cite the page(s) in your text that contains supporting information. (10 points)

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