A now storm drainage system must be constructed right away to reduce penódic flooding that occurs in a city that is in a valley Five mutually exclusive designs have been proposed, and their present worth (in thousands of dollars) of costs and benofits are the following a. Which system has the greatest B-C ratio? b. Which system has the largest incremental B-C ratio (based on differences between alternatives)? c. Which system should be chosen? System $5.000 $13.000 PW of costs PW of S00 $5,000 $9,000 6,000 14,000 17,000 6.000 24.000 benefits a. System 1 has the greatest B-C ratio, which is 667 (Round to two decimal places) b. System has the largest incremental B-C which is (Round to two decimal places )

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
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A new storm drainage system must be constructed right away to reduce periodic
flooding that occurs in a city that is in a valley, Five mutually exclusive designs have
been proposed, and theit present worth (in thousands of dollars) of costs and
benofits are the following.
a. Which system has the greatest B-C ratio?
b. Which system has the largest incremental B-C ratio (based on differences
between alternatives)?
c. Which system should be chosen?
System
1.
PW of
S900
$5,000
$9,000 55 000 $13.000
costs
6,000 24.000
PW of
benefits
6,000
14,000
17,000
a. System 1
has the greatest B-C ratio, which is 667 (Round to two decimal places)
b. System
has the largest incremental B-C, which is (Round to two decimal places )
Transcribed Image Text:A new storm drainage system must be constructed right away to reduce periodic flooding that occurs in a city that is in a valley, Five mutually exclusive designs have been proposed, and theit present worth (in thousands of dollars) of costs and benofits are the following. a. Which system has the greatest B-C ratio? b. Which system has the largest incremental B-C ratio (based on differences between alternatives)? c. Which system should be chosen? System 1. PW of S900 $5,000 $9,000 55 000 $13.000 costs 6,000 24.000 PW of benefits 6,000 14,000 17,000 a. System 1 has the greatest B-C ratio, which is 667 (Round to two decimal places) b. System has the largest incremental B-C, which is (Round to two decimal places )
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