Calculate the benefit-cost ratio with a 10-year useful life, and a 25% MARR, and determine which of the following mutually exclusive alternatives should be selected. A B C D E Cost $100 $200 $300 $400 $500 Annual benefit 37 60 83 137 150 O a. Recommendation: Option A. With B/C₂ = 1.32, B/C -1.07. 8/C=0.99, B/C = 1.22, B/C = 1.07 Ob. Recommendation: Option D. With B/CA 1.32. B/CB 1:07, B/Cc = 0.99, B/CD 1.22, B/C 1.07 OC Recommendation: Option E. With B/C = 1.32, 8/C= 107, 8/Cc - 0.99. B/Cp - 1:22. B/C 1.07 Od Recommendation: Option B. With B/CA 1.32, B/C 1.07, B/Cc - 0.99, B/Cp 1.22. B/C- 1.07
Calculate the benefit-cost ratio with a 10-year useful life, and a 25% MARR, and determine which of the following mutually exclusive alternatives should be selected. A B C D E Cost $100 $200 $300 $400 $500 Annual benefit 37 60 83 137 150 O a. Recommendation: Option A. With B/C₂ = 1.32, B/C -1.07. 8/C=0.99, B/C = 1.22, B/C = 1.07 Ob. Recommendation: Option D. With B/CA 1.32. B/CB 1:07, B/Cc = 0.99, B/CD 1.22, B/C 1.07 OC Recommendation: Option E. With B/C = 1.32, 8/C= 107, 8/Cc - 0.99. B/Cp - 1:22. B/C 1.07 Od Recommendation: Option B. With B/CA 1.32, B/C 1.07, B/Cc - 0.99, B/Cp 1.22. B/C- 1.07
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
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
Problem 6E
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Transcribed Image Text:Calculate the benefit-cost ratio with a 10-year useful life, and a 25% MARR, and determine which of the following mutually exclusive
alternatives should be selected.
A
B
C
D
E
Cost
$100
$200
$300
$400
$500
Annual benefit
37
60
83
137
150
O a. Recommendation: Option A. With B/C₂ = 1.32, B/C₁1.07, B/C=0.99, B/C = 1.22, B/C = 1.07
Ob.
Recommendation: Option D. With B/CA 1.32. B/CB 1:07, B/Cc = 0.99, B/CD 1.22, B/C 1.07
OC Recommendation: Option E. With B/C = 1.32, 8/C= 107, 8/Ce - 0.99. B/Cp 122, B/C 1.07
=
Od
Recommendation: Option B. With B/CA 1.32, B/C 1.07, B/Cc - 0.99, B/Cp 1.22. B/C 1.07
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