Consider a piece of equipment that has the following cost and benefit estimates, and the interest rate is 15% per year: Initial investment: $200,000 Equipment life: 10 years Salvage value: $10,000 Annual receipts: $100,000 Annual expenses: $50,000 What is the modified B/C ratio of this equipment? Click the icon to view the interest and annuity table for discrete compounding when = 15% per year. Thr modified cost-benefit ratio is (Round to two decimal places.) According to the B-C ratio method, the project is More Info Single Payment Compound Amount Present Factor Worth Factor To Find F To Find P Discrete Compounding; /= 15% Compound Amount Factor To Find F Uniform Series Sinking Present Capital Recovery Worth Factor To Find P Fund Factor To Find A Factor To Find A Given P Given F Given A Given A Given F Given P N FIP P/F F/A PIA A/F A/P 1 1.1500 0.8696 1.0000 0.8696 1.0000 1.1500 2 1.3225 0.7561 2.1500 1.6257 0.4651 0.6151 3 1.5209 0.6575 3.4725 2.2832 0.2880 0.4380 4 1.7490 0.5718 4.9934 2.8550 0.2003 0.3503 5 2.0114 0.4972 6.7424 3.3522 0.1483 0.2983 6 2.3131 0.4323 8.7537 3.7845 0.1142 0.2642 7 2.6600 0.3759 11.0668 4.1604 0.0904 0.2404 8 3.0590 0.3269 13.7268 4.4873 0.0729 0.2229 9 3.5179 0.2843 16.7858 4.7716 0.0596 0.2096 10 4.0456 0.2472 20.3037 5.0188 0.0493 0.1993 11 4.6524 0.2149 24.3493 5.2337 0.0411 0.1911 12 5.3503 0.1869 29.0017 5.4206 0.0345 0.1845 13 6.1528 0.1625 34.3519 5.5831 0.0291 0.1791 14 7.0757 0.1413 40.5047 5.7245 0.0247 0.1747 15 8.1371 0.1229 47.5804 5.8474 0.0210 0.1710 16 9.3576 0.1069 55.7175 5.9542 0.0179 0.1679 17 10.7613 0.0929 65.0751 6.0472 0.0154 0.1654 18 12.3755 0.0808 75.8364 6.1280 0.0132 0.1632
Consider a piece of equipment that has the following cost and benefit estimates, and the interest rate is 15% per year: Initial investment: $200,000 Equipment life: 10 years Salvage value: $10,000 Annual receipts: $100,000 Annual expenses: $50,000 What is the modified B/C ratio of this equipment? Click the icon to view the interest and annuity table for discrete compounding when = 15% per year. Thr modified cost-benefit ratio is (Round to two decimal places.) According to the B-C ratio method, the project is More Info Single Payment Compound Amount Present Factor Worth Factor To Find F To Find P Discrete Compounding; /= 15% Compound Amount Factor To Find F Uniform Series Sinking Present Capital Recovery Worth Factor To Find P Fund Factor To Find A Factor To Find A Given P Given F Given A Given A Given F Given P N FIP P/F F/A PIA A/F A/P 1 1.1500 0.8696 1.0000 0.8696 1.0000 1.1500 2 1.3225 0.7561 2.1500 1.6257 0.4651 0.6151 3 1.5209 0.6575 3.4725 2.2832 0.2880 0.4380 4 1.7490 0.5718 4.9934 2.8550 0.2003 0.3503 5 2.0114 0.4972 6.7424 3.3522 0.1483 0.2983 6 2.3131 0.4323 8.7537 3.7845 0.1142 0.2642 7 2.6600 0.3759 11.0668 4.1604 0.0904 0.2404 8 3.0590 0.3269 13.7268 4.4873 0.0729 0.2229 9 3.5179 0.2843 16.7858 4.7716 0.0596 0.2096 10 4.0456 0.2472 20.3037 5.0188 0.0493 0.1993 11 4.6524 0.2149 24.3493 5.2337 0.0411 0.1911 12 5.3503 0.1869 29.0017 5.4206 0.0345 0.1845 13 6.1528 0.1625 34.3519 5.5831 0.0291 0.1791 14 7.0757 0.1413 40.5047 5.7245 0.0247 0.1747 15 8.1371 0.1229 47.5804 5.8474 0.0210 0.1710 16 9.3576 0.1069 55.7175 5.9542 0.0179 0.1679 17 10.7613 0.0929 65.0751 6.0472 0.0154 0.1654 18 12.3755 0.0808 75.8364 6.1280 0.0132 0.1632
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Consider a piece of equipment that has the following cost and benefit estimates, and the interest rate is 15% per year:
Initial investment: $200,000
Equipment life: 10 years
Salvage value: $10,000
Annual receipts: $100,000
Annual expenses: $50,000
What is the modified B/C ratio of this equipment?
Click the icon to view the interest and annuity table for discrete compounding when = 15% per year.
Thr modified cost-benefit ratio is
(Round to two decimal places.)
According to the B-C ratio method, the project is
More Info
Single Payment
Compound
Amount
Present
Factor
Worth Factor
To Find F
To Find P
Discrete Compounding; /= 15%
Compound
Amount
Factor
To Find F
Uniform Series
Sinking
Present
Capital
Recovery
Worth Factor
To Find P
Fund
Factor
To Find A
Factor
To Find A
Given P
Given F
Given A
Given A
Given F
Given P
N
FIP
P/F
F/A
PIA
A/F
A/P
1
1.1500
0.8696
1.0000
0.8696
1.0000
1.1500
2
1.3225
0.7561
2.1500
1.6257
0.4651
0.6151
3
1.5209
0.6575
3.4725
2.2832
0.2880
0.4380
4
1.7490
0.5718
4.9934
2.8550
0.2003
0.3503
5
2.0114
0.4972
6.7424
3.3522
0.1483
0.2983
6
2.3131
0.4323
8.7537
3.7845
0.1142
0.2642
7
2.6600
0.3759
11.0668
4.1604
0.0904
0.2404
8
3.0590
0.3269
13.7268
4.4873
0.0729
0.2229
9
3.5179
0.2843
16.7858
4.7716
0.0596
0.2096
10
4.0456
0.2472
20.3037
5.0188
0.0493
0.1993
11
4.6524
0.2149
24.3493
5.2337
0.0411
0.1911
12
5.3503
0.1869
29.0017
5.4206
0.0345
0.1845
13
6.1528
0.1625
34.3519
5.5831
0.0291
0.1791
14
7.0757
0.1413
40.5047
5.7245
0.0247
0.1747
15
8.1371
0.1229
47.5804
5.8474
0.0210
0.1710
16
9.3576
0.1069
55.7175
5.9542
0.0179
0.1679
17
10.7613
0.0929
65.0751
6.0472
0.0154
0.1654
18
12.3755
0.0808
75.8364
6.1280
0.0132
0.1632
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