A food processing plant has an estimated initial cost P15.5M with a net annual profit of P3M for the first four years of operations. In year 5 the plant is expected to expand to expand to meet growing demand. Cost of expansion is P6M with net annual profit increasing by P1.5M. Determine the B/C ratio for a 12-year operating period using a 12.5% MARR.

A food processing plant has an estimated initial cost P15.5M with a net annual profit of P3M for the first four years of operations. In year 5 the plant is expected to expand to expand to meet growing demand. Cost of expansion is P6M with net annual profit increasing by P1.5M. Determine the B/C ratio for a 12-year operating period using a 12.5% MARR.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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