2. B/C RATIO The city council of Morristown is considering the purchase of one new fire truck. The options are Truck X and Truck Y. the appropriate financial data are as follows: Truck X Truck Y $50,000 $64,000 $5,000 Annual Reduction in fire damage $20,000 | $22,000 6 Capital investment Annual Maintenance expenses $6,000 Life in years 6 The purchase is to be financed by money borrowed at 10%. Which truck is recommended using B/C ratio method.

2. B/C RATIO The city council of Morristown is considering the purchase of one new fire truck. The options are Truck X and Truck Y. the appropriate financial data are as follows: Truck X Truck Y $50,000 $64,000 $5,000 Annual Reduction in fire damage $20,000 | $22,000 6 Capital investment Annual Maintenance expenses $6,000 Life in years 6 The purchase is to be financed by money borrowed at 10%. Which truck is recommended using B/C ratio method.

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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Question

2. B/C RATIO
The city council of Morristown is considering the purchase of one new fire truck.
The options are Truck X and Truck Y. the appropriate financial data are as follows:
Truck X Truck Y
$50,000 $64,000
$5,000
Annual Reduction in fire damage $20,000 | $22,000
Capital investment
Annual Maintenance expenses
$6,000
Life in years
6
6
The purchase is to be financed by money borrowed at 10%. Which truck is
recommended using B/C ratio method.

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