7A-17 An investor is considering two mutually exclusive projects. She can obtain a 6% before-tax rate of return on external investments, but she requires a minimum attractive rate of return of 7% for these projects. Use a 10-year analysis period to com- pute the incremental rate of return from investing in Project A rather than Project B Project A: Build Drive-Up Photo Shop Project B: Buy Land in Hawaii $58,500 $ Initial capital investment Net uniform 6648 0 annual income Salvage value 30,000 138,000 10 years hence Computed rate of return 8% 11%
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