Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 85 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.
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 85 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.
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
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Question
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be
85
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.
Transcribed Image Text:Alternative
Initial cost
$51,000
$145,000
$56,000
$62,000
Annual benefits
$7,500
$21,000
$9,500
$10,500
B-C ratio
1.23
1.21
1.41
1.41
.....
=. Fill-in the table below. (Round to two decimal places.)
Alternative
Inc. B-C ratio
Is the alternative acceptabl
A
1.23
Yes
C
B
D
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