Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10%Alternative AInitial costAnnual maintenance costEstimated annual benefit$50,000$4,000$10,000Alternative BInitial cost$30,000Annual maintenance cost $3,000Estimated annual benefit $9,000a. Select A with B/C =1.14b.Select B with B/C 1.14OC. Select B with B/C = 0.14O d. Reject A with B/C = 1.14

The rate of return (ROR), regularly suggested as the return on investment (ROI), is a measure used…

Alternative A Initial cost $50,000 Annual maintenance cost $4,000 Estimated annual benefit $10,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 O a. Select A with B/C =1.14 Ob Select B with B/C = 1.14 OC. Select B with B/C = 0.14 O d. Reject A with B/C = 1.14 1- Cost ration with, expected life of 10 years and rate of return of 10

Alternative A Initial cost $50,000 Annual maintenance cost $4,000 Estimated annual benefit $10,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 O a. Select A with B/C =1.14 Ob Select B with B/C = 1.14 OC. Select B with B/C = 0.14 O d. Reject A with B/C = 1.14 1- Cost ration with, expected life of 10 years and rate of return of 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10%
Alternative A
Initial cost
Annual maintenance cost
Estimated annual benefit
$50,000
$4,000
$10,000
Alternative B
Initial cost
$30,000
Annual maintenance cost $3,000
Estimated annual benefit $9,000
a. Select A with B/C =1.14
b.
Select B with B/C 1.14
OC. Select B with B/C = 0.14
O d. Reject A with B/C = 1.14

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