System EOY A B -S160,000 -$245,000 -$200,000 1 80,000 120,000 80,000 2 70,000 100,000 80,000 3 60,000 80,000 60,000 80,000 4 50,000 80,000

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
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A town in northern Colorado is planning on investing in a water purification system. Three mutually exclusive systems have been proposed, and their capital investment costs and net annual benefits are the following (salvage values are negligible). If the town’s MARR is 10% per year, use the B–C ratio
method to determine which system is best.

System
EOY
A
B
-S160,000 -$245,000 -$200,000
1
80,000
120,000
80,000
2
70,000
100,000
80,000
3
60,000
80,000
60,000
80,000
4
50,000
80,000
Transcribed Image Text:System EOY A B -S160,000 -$245,000 -$200,000 1 80,000 120,000 80,000 2 70,000 100,000 80,000 3 60,000 80,000 60,000 80,000 4 50,000 80,000
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