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Business, 06.05.2020 03:35 isiss18

OI Inc. has decided to acquire a new Solar system. After considering several options it has narrowed its search to two satellites. SA: purchase cost of $339,751 and operating costs of $32,769 per year (paid at the end of each year). SB: purchase cost of $175,408 and operating costs of $60,771 per year (paid at the end of each year). Both satellites have a service life of 12 years. Based on the defender-challenger approach and given that the MARR is 10%, reinvestment rate is 7%, and minimum external rate of return is 6%, compute the incremental external rate of return of choosing the most expensive satellite. Note: round your answer to two decimal places, and do not include spaces, percentage signs, plus or minus signs, nor commas. If your answer is 15%, write 15, not 0.15)

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OI Inc. has decided to acquire a new Solar system. After considering several options it has narrowed...
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