If MARR5 which alternative should be selected Year 22000 800

If MARR-5%, which alternative should be selected? Year 22,000 8,000 8,000 8,000 -26,000 9,500 9,500 9,500 0 2 3 Either Alt. A or B C) Alt. B O Alt. A

Solution

Both are generating negative cashflow but aletrnative b is generetaing less negative net cash flow so B should be selected.

Correct option will be Alt. B.  

5.00%
	0	1	2	3
Cashflow	-22000	8000	8000	8000
present value	-22000	7619.048	7256.236	6910.700788
NPV	-214.02
irr	4.48%
5.00%
	0	1	2	3
Cashflow	-26000	9500	9500	9500
present value	-26000	9047.619	8616.78	8206.457186
NPV	-129.14
IRR	4.73%