Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 75 years, and the sponsoring agency's MARR is 12% per year Annual benefits to the public have been estimated by an advisory committee and are shown below Use the B-C method (incrementally) to select the best jogging track Alternative B Initial cost Annual benefits B-C ratio $56,000 $9,000 $61,000 1.34 $11,000 1.50 C $50,000 $7,000 1.17 $145,000 $19,000 1.09 Perform the incremental B-C Analysis. Fill-in the table below (Round to two decimal places.) Alternative Inc. B-C ratio 1.17 Is the alternative acceptable? Yes
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 75 years, and the sponsoring agency's MARR is 12% per year Annual benefits to the public have been estimated by an advisory committee and are shown below Use the B-C method (incrementally) to select the best jogging track Alternative B Initial cost Annual benefits B-C ratio $56,000 $9,000 $61,000 1.34 $11,000 1.50 C $50,000 $7,000 1.17 $145,000 $19,000 1.09 Perform the incremental B-C Analysis. Fill-in the table below (Round to two decimal places.) Alternative Inc. B-C ratio 1.17 Is the alternative acceptable? Yes
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 15P
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