4. A Taxi company is considering the following 4 cars for their limo service. All alternatives need tobe replaced after 6 years. Consider a MARR of 9%.CostYearly BenefitAlternative 1$65,000$16,300Alternative 2$55,000$15,100Alternative 3$25,000$5.200Alternative 4$80,000$21,300Determine the following the best alternative based on the following analyses:a) Discounted payback periodb) Future worthc) Benefit-Cost ratio

Discounted Pay Back Period represent the time period in which cost incurred on project will be…

Answered: Determine the following the best…

Determine the following the best alternative based on the following analyses: a) Discounted payback period b) Future worth c) Benefit-Cost ratio

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

4. A Taxi company is considering the following 4 cars for their limo service. All alternatives need to
be replaced after 6 years. Consider a MARR of 9%.
Cost
Yearly Benefit
Alternative 1
$65,000
$16,300
Alternative 2
$55,000
$15,100
Alternative 3
$25,000
$5.200
Alternative 4
$80,000
$21,300
Determine the following the best alternative based on the following analyses:
a) Discounted payback period
b) Future worth
c) Benefit-Cost ratio

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