10.4 (LG 10.4) The following data are available for two mutually exclusive projects: Project A Project B PW(benefits) $19 000 000 $15 000 000 PW(operating and maintenance costs) 5 000 000 8 000 000 PW(capital cost) 5 000 000 1 000 000 a. Compute the benefit-cost ratios for both projects. b. Compute the modified benefit-cost ratios for both projects. c. Compute the benefit-cost ratio for the increment between the projects.
10.4 (LG 10.4) The following data are available for two mutually exclusive projects: Project A Project B PW(benefits) $19 000 000 $15 000 000 PW(operating and maintenance costs) 5 000 000 8 000 000 PW(capital cost) 5 000 000 1 000 000 a. Compute the benefit-cost ratios for both projects. b. Compute the modified benefit-cost ratios for both projects. c. Compute the benefit-cost ratio for the increment between the projects.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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the answer to this question is Q10.4 a= 1.9, b= 1.667, c=1.9 and 1.667, d= 2.8 and 7, e=4
plz help me with this question
we just need to find how we get that answer for this question, please help NO EXCEL
Transcribed Image Text:10.4 (LG 10.4) The following data are available for two mutually exclusive projects:
Project A
Project B
PW(benefits)
$19 000 000
$15 000 000
PW(operating and maintenance costs)
5 000 000
8 000 000
PW(capital cost)
5 000 000
1 000 000
a. Compute the benefit-cost ratios for both projects.
b. Compute the modified benefit-cost ratios for both projects.
c. Compute the benefit-cost ratio for the increment between the projects.
d. Compute the present worths of the two projects.
e. Which is the preferred project? Explain.
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