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Learning Objectives
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Why incremental analysis?
State why an incremental analysis is necessary for comparing alternatives by the ROR method.
Incremental cash flows
Prepare a tabulation of incremental cash flows for two alternatives.
Interpretation
Interpret the meaning of ROR on the incremental initial investment.
Incremental ROR by PW
Select the better of two alternatives using incremental or breakeven ROR analysis based on present worth.
Incremental ROR by AW
Select the better of two alternatives using a ROR analysis based on annual worth.
Multiple alternatives
Select the best of multiple alternatives using an incremental ROR analysis.
Spreadsheets
Develop spreadsheets that include PW, AW, and ROR evaluation for multiple, different-life alternatives.







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