Two facilities are being evaluated, with the projected life of each facility being 10 years. The cash flows for each facility are shown in the table below.
|
Cash Flow
|
Alt. A
|
Alt. B
|
|
First Cost
|
$450,000
|
$615,000
|
|
Annual O & M Cost
|
$15,000
|
$10,000
|
|
Annual Benefits
|
$85,000
|
$158,000
|
|
Salvage Value
|
$45,000
|
$65,000
|
What is the incremental ROR for the two alternatives?