### Calculate the Conventional Benefit-Cost RatioGiven the following information, calculate the conventional benefit-cost ratio for the alternative:- Initial Investment: $350,000- Revenues: $150,000- Costs: $55,000- Salvage Value: $120,000- Useful Life: 7 years- Minimum Attractive Rate of Return (MARR): 0.1#### Select One:a. 1.3130 b. 1.2960 c. 1.4659 d. 1.3681 e. 1.2114 Please select the correct option based on your calculations. On the educational platform, make sure to show your step-by-step solution to derive the benefit-cost ratio.---Educational Note:The conventional benefit-cost ratio (BCR) is a financial metric used to evaluate the desirability of an investment or project. It is calculated by dividing the present value of benefits by the present value of costs. If the BCR is greater than 1, the project is generally considered to be financially viable.

Benefits to cost ratio can be measured as ratio of the present value of benefits to the present…

Answered: Calculate the conventional benefit-cost…

Calculate the conventional benefit-cost ratio for the alternative: Initial Investment Revenues Costs Salvage Value Useful life MARR 350000 150000 55000 120000 7 0.1

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

Risk and return

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Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

### Calculate the Conventional Benefit-Cost Ratio

Given the following information, calculate the conventional benefit-cost ratio for the alternative:

- Initial Investment: $350,000
- Revenues: $150,000
- Costs: $55,000
- Salvage Value: $120,000
- Useful Life: 7 years
- Minimum Attractive Rate of Return (MARR): 0.1

#### Select One:
a. 1.3130
b. 1.2960
c. 1.4659
d. 1.3681
e. 1.2114

Please select the correct option based on your calculations. On the educational platform, make sure to show your step-by-step solution to derive the benefit-cost ratio.

---

Educational Note:
The conventional benefit-cost ratio (BCR) is a financial metric used to evaluate the desirability of an investment or project. It is calculated by dividing the present value of benefits by the present value of costs. If the BCR is greater than 1, the project is generally considered to be financially viable.

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