Please explain reasoning Based on the incremental return sho

Please explain reasoning:

Based on the incremental return shown and the company’s MARR of 16% per year, the alternative that should be selected is _______________.

The project initial costs are such that A < B < C.

Comparison

Rate of Return, %

A to DN

23.4

B to DN

8.1

C to DN

16.6

A to B

-5.1

A to C

12.0

B to C

83.9

Possible Answers:

Alternative A

Cannot be determined.

Do nothing

Alternative B - this answer is incorre

Alternative C

Solution

Here, rate of return from incremental investing from Ato C is (A minus C) is 12%, which is lower than the MARR 16%, so project C should be selected over project A.

Hence, correct option is Alternative C.