When comparing two mutually exclusive alternatives by the ROR method, if the rat

Question

When comparing two mutually exclusive alternatives by the ROR method, if the rate of return on the alternative with the higher first cost is less than that of the lower first-cost alternative: (a) The rate of return on the increment between the two is greater than the rate of return for the lower first-cost alternative (b) The rate of return on the increment is less than the rate of return for the lower first-cost alternative (c) The higher first-cost alternative may be the better of the two alternatives (c) The lower first-cost alternative should be selected

Explanation / Answer

The lower first cost alternative should be selected as it's ROR is higher Option D is correct

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