Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
(engineering economic ) Four alternatives with cash flows (million rupiah) as follows:
Determine the best alternative based on a 12% MARR using the following methods: (a) Rate of Return ; (b) Payback Period
![Year
A
B
-100
-120
-40
1
+30
-50
2
+10
+30
+20
3
+15
+30
+20
4
+20
+30
+20
+25
+30
+20
6
+30
+30
+20
7
+35
+30
+20
8
+40
+30
+20
+45
+30
+20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdd8f2877-2578-48c0-ab77-5dda294aaf93%2F8d67583c-9b1e-4f36-ab16-1a14ad272c85%2Fds16hs9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Year
A
B
-100
-120
-40
1
+30
-50
2
+10
+30
+20
3
+15
+30
+20
4
+20
+30
+20
+25
+30
+20
6
+30
+30
+20
7
+35
+30
+20
8
+40
+30
+20
+45
+30
+20
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
A rate of return (RoR) is the net gain or loss of an investment over a specified time period expressed as a percentage of the initial cost of the investment. When you calculate the rate of return, you are calculating the percentage change from the start of the period to the end. The rate of return of an investment is the loss or gain over a specific time period expressed as a percentage of the initial cost of the investment. The payback period is the amount of time it takes for an investment to reach its breakeven point. People and corporations invest their money primarily to be paid back, which is why the payback period exists
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education