You have 3000 to invest in new projects using a MARR of 6 a

You have $3000 to invest in new projects, using a MARR of 6%. a. Which of the following projects should you invest in? b. What is the opportunity cost? NPW/Cost at 6% Project Cost EUAB IRR 0.0800 A $ 1,000 125 1,200 1,400 1,600 1,800 4% 8% 5% 6% 796 0.1040 -0.0274 180 185 220 255 0.0120 0.0427

Solution

a. $3000 should be invested in Project B($1200) and E($1800) as the IRR is greater than 6 percent and NPW is positive

b. The opportunity cost is the next best alternative forgone and here, it is project D and C which is $405 (220+185) forgone