The following four alternative investments are being compared at MARR of 12%. Which investment is the most economical over the service life? Alt. E Alt. Q Alt. Y Alt. M Service life (years) 10 10 10 10 Net PW $645,000 $533,000 $590,000 $495,000 B/C 1.7 2.3 2.0 1.8 Disc payback period (yrs) 9 O A. Alt Q because it has the highest B/C ratio O B. Alt Y because it has the shortest discounted payback period O C. Alt E because it has the highest net PW O D. Alt M because it has the longest discounted payback period
The following four alternative investments are being compared at MARR of 12%. Which investment is the most economical over the service life? Alt. E Alt. Q Alt. Y Alt. M Service life (years) 10 10 10 10 Net PW $645,000 $533,000 $590,000 $495,000 B/C 1.7 2.3 2.0 1.8 Disc payback period (yrs) 9 O A. Alt Q because it has the highest B/C ratio O B. Alt Y because it has the shortest discounted payback period O C. Alt E because it has the highest net PW O D. Alt M because it has the longest discounted payback period
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The following four alternative investments are being compared at MARR of 12%. Which investment is the most economical over the service life?
Alt. E
Alt. Q
Alt. Y
Alt. M
Service life (years)
10
10
10
10
Net PW
$645,000
$533,000
$590,000
$495,000
B/C
1.7
2.3
2.0
1.8
Disc payback period (yrs)
6.
9
O A. Alt Q because it has the highest B/C ratio
O B. Alt Y because it has the shortest discounted payback period
OC. Alt E because it has the highest net PW
O D. Alt M because it has the longest discounted payback period](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59eb438f-2212-4d8e-97cc-caca6c2c4b9b%2Fdd4a073c-403c-4b3f-8a69-9218306cbffb%2Fszz396_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following four alternative investments are being compared at MARR of 12%. Which investment is the most economical over the service life?
Alt. E
Alt. Q
Alt. Y
Alt. M
Service life (years)
10
10
10
10
Net PW
$645,000
$533,000
$590,000
$495,000
B/C
1.7
2.3
2.0
1.8
Disc payback period (yrs)
6.
9
O A. Alt Q because it has the highest B/C ratio
O B. Alt Y because it has the shortest discounted payback period
OC. Alt E because it has the highest net PW
O D. Alt M because it has the longest discounted payback period
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