The data associated with two new machines being considered f

The data associated with two new machines being considered for use are given in the table below. Assume a maximum acceptable rate of return of 6%, and a 5-years life with no salvage value for each. Which of the following is closed to the rate of return on the incremental investment? 12% 10% 7.0% 5%

Solution

10% is closest to the rate of return on the incremental investment .