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None of the following identifies the best of several mutually exclusive alternatives except

  • A.the lowest first cost among them
  • B.incremental analysis of the differences between them
  • C.the highest individual internal rate of return
  • D.the shortest simple payback period

Answer: B

Only the increments between the alternatives address the question actually being decided, which is whether each extra tranche of capital earns its keep. Individual rates, paybacks and first costs all ignore scale or timing.

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