We covered various methods to identify the preferred alternative. For example, the rate-of-return (ROR)
method states that the base alternative is the one that instructs us to use incremental analysis to compare
the base alternative to the next smallest investment cost alternative. Meaning, if the change in IRR is
greater than or equal to MARR, eliminate the base and move on to the next comparison. If the change in
IRR is less than MARR, keep the base and move on to the next comparison.
Discuss this decision rule.
attach an example if possible, less words one example
Sample Solution