The Department of Defense is considering three sites in the National Wildlife Preserve for extrac- tion of rare metals. The cash flows associated with each site are summarized. The extraction period is limited to 5 years and the interest rate is 10% per year. Use the B/C method to determine which site, if any, is acceptable. The monetary unit is $ million. (Note: Problem 9.56 includes further analysis for this situation.) Site A B с Initial cost, $ Annual cost, $/year Annual benefits, $/year Annual disbenefits, $/year 0.5 55555 50 90 3 20 29 06 22 200 4 6 61 2.1
The Department of Defense is considering three sites in the National Wildlife Preserve for extrac- tion of rare metals. The cash flows associated with each site are summarized. The extraction period is limited to 5 years and the interest rate is 10% per year. Use the B/C method to determine which site, if any, is acceptable. The monetary unit is $ million. (Note: Problem 9.56 includes further analysis for this situation.) Site A B с Initial cost, $ Annual cost, $/year Annual benefits, $/year Annual disbenefits, $/year 0.5 55555 50 90 3 20 29 06 22 200 4 6 61 2.1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Department of Defense is considering three
sites in the National Wildlife Preserve for extrac-
tion of rare metals. The cash flows associated with
each site are summarized. The extraction period is
limited to 5 years and the interest rate is 10% per
year. Use the B/C method to determine which site,
if any, is acceptable. The monetary unit is $ million.
(Note: Problem 9.56 includes further analysis for
this situation.)
Site
A B
с
Initial cost, $
Annual cost, $/year
Annual benefits, $/year
Annual disbenefits, $/year
0.5
55555
50
90
3
20
29
06
22
200
4
6
61
2.1
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