A higher-cost alternative to be suitable, the incremental rate of the return must be greater than the minimum acceptable rate of return(MARR).
When a company determines whether a project is worth the costs incurred in performing it, it may evaluate it by comparing the internal return rate (IRR) for the project with the hurdle rate, or the minimum acceptable return rate (MARR).
When you compare two or more alternatives, the one with the highest ROR is not really the other way to increase profits at MARR, which is a good goal.
Thus, In order for a higher-cost alternative to be attractive, the incremental rate of return must be greater than the minimum acceptable rate of return(MARR).
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