Given the cash flows and information in the table below. Which alternative do youchoose (mutually exclusive)?MARR6%Life (years)4ABDInitial CostCF, years 1-4PW B11,00013,50014,00084004000450048803000$13,860 $15,593 $16,910 $10,395B/C1.261.161.211.24A-DB-DC-A1.02 2.63C-DВ-АC-BB/C1.331.021.160.69

In the cost benefit ratio we choose the project with high B/C ratio.

Answered: ARR 6% fe (years) A B C D. itial Cost…

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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ARR 6% fe (years) A B C D. itial Cost F, years 1-4 11,000 13,500 14,000 8400 4000 4500 4880 3000 W B $13,860 $15,593 $16,910 $10,395 1.26 1.16 1.21 1.24 A-D В-D C-D B-A C-A C-B B/C 1.33 1.02 1.16 0.69 1.02 2.63