Selex Aerospace is considering five independent projects to improve net revenue as estimated below.
(All estimates have been divided by $1000.) The company’s MARR is 15% per year. Use a handbased
solution and a spreadsheet-based analysis to determine the following: (a) The projects that should be undertaken on the basis of IROR if the investment limit is $120,000.
(b) The overall rate of return if the funds not invested in a project earns at a rate of return equal to the MARR.
Initial Net Revenue
Project Cost, $ Increase, $/Year Life, Years
X −30,000 9,000 10
Y −15,000 4,900 10
Z −45,000 11,100 10
A −70,000 19,000 10
B −40,000 10,000 10