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A tire manufacturing plant is considering alternatives A and B for production. A minimum attractive rate of return (MARR) of 8% is desired. Considering the following, which alternative should be selected?
Year : 0 1 2 3 4 5
Option A : −Rs. 350, +Rs. 110, +Rs. 110, +Rs. 110, +Rs. 110, +Rs. 110
Option B : −Rs. 175, +Rs. 65, +Rs. 65, +Rs. 65, +Rs. 65, +Rs. 65
Choose A since the incremental interest rate is greater than the MARR
Choose A since the incremental interest rate is less than the MARR
Choose B since the incremental interest rate is greater than the MARR
Choose B since the incremental interest rate is less than the MARR