Chapter 10. For-Profit Decision Analysis
This chapter explains how to take a set of mutually exclusive alternatives, as developed in the previous chapter, and find the best one to carry out in a for-profit organization. A systematic selection process is explained here. Two variations on that process are also explained. One of the variations is to base the decision on total cash-flow streams vs. differential cash-flow streams. The other variation is on the specific bases of comparison (as defined in Chapter 8) to be used. This chapter also introduces and explains the minimum attractive rate of return (MARR), which is a critical factor in for-profit decision analysis.
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