A small town is considering two potential alternatives for a garbage collection system. The following cost data has been compiled. If the interest rate is 7%, Using the conventional B/C ratio, what is the ratio and which alternative should be chosen? Salvage value is considered an offset to the original cost. System A System B Year 0, first cost 350,000 250,000 Annual savings 32,000 22,000 Salvage value 50,000 40,000 Llfe 30 30

A small town is considering two potential alternatives for a garbage collection system. The following cost data has been compiled. If the interest rate is 7%, Using the conventional B/C ratio, what is the ratio and which alternative should be chosen? Salvage value is considered an offset to the original cost. System A System B Year 0, first cost 350,000 250,000 Annual savings 32,000 22,000 Salvage value 50,000 40,000 Llfe 30 30

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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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

A small town is considering two potential alternatives
for a garbage collection system. The following cost
data has been compiled. If the interest rate is 7%,
Using the conventional B/C ratio, what is the ratio
and which alternative should be chosen? Salvage
value is considered an offset to the original cost.
System A
System B
Year O, first cost 350,000
250,000
Annual savings 32,000
22,000
Salvage value
50,000
40,000
LIfe
30
30

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