If two mutually exclusive alternatives have B/C ratios of 1.4, and 1.5 for the lower and higher-cost ones, respectively,a. the B/C ratio on the increment between them is equal to 1.5b. the B/C ratio on the increment between them is between 1.4 and 1.5c. the B/C ratio on the increment between them is less than 1.5d. the higher-cost alternative is definitely the better one
If two mutually exclusive alternatives have B/C ratios of 1.4, and 1.5 for the lower and higher-cost ones, respectively,a. the B/C ratio on the increment between them is equal to 1.5b. the B/C ratio on the increment between them is between 1.4 and 1.5c. the B/C ratio on the increment between them is less than 1.5d. the higher-cost alternative is definitely the better one
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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If two mutually exclusive alternatives have B/C ratios of 1.4, and 1.5 for the lower and higher-cost ones, respectively,
a. the B/C ratio on the increment between them is equal to 1.5
b. the B/C ratio on the increment between them is between 1.4 and 1.5
c. the B/C ratio on the increment between them is less than 1.5
d. the higher-cost alternative is definitely the better one
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