Carp, Inc. wants to evaluate two methods of packaging their products. Use an interest rate of 15%…

➤ Why perform incremental annual worth comparison between the two packaging methods?
Incremental annual worth isolates the net effect of choosing the higher-cost option. Subtract the lower-cost alternative’s annual worth from the higher-cost one and evaluate the difference at 15%. If the incremental annual worth is positive, the higher-cost alternative provides net benefit and should be chosen.