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
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text: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
Initial cost
$56,000
Annual benefits $9,000
B-C ratio
1.34
B
$61,000
$11,000
1.50
C
$50,000
$7,000
1.17
D
$145,000
$19,000
1.09
Perform the incremental B-C Analysis. Fill-in the table below (Round to two decimal places.)
Alternative
C
Inc. B-C ratio
Is the alternative acceptable?
1.17
Yes
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education