Calculate the Benefit cos ratio.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27

The benefit cost ratio is 1.27. Since the BC value is greater than 1, it is acceptable project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Answer

M” method Given the following model, solve by the method of “M”. (see image)

As indicated in the attached image, U.S. earnings for high- and low-skill workers as measured by educational attainment began diverging in the 1980s. The remaining questions in this problem set use the model for the labor market developed in class to walk through potential explanations for this trend. 1. Assume that there are just two types of workers, low- and high-skill. As a result, there are two labor markets: supply and demand for low-skill workers and supply and demand for high-skill workers. Using two carefully drawn labor-market figures, show that an increase in the demand for high skill workers can explain an increase in the relative wage of high-skill workers. 2. Using the same assumptions as in the previous question, use two carefully drawn labor-market figures to show that an increase in the supply of low-skill workers can explain an increase in the relative wage of high-skill workers.

Answer 2

Question

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27

The benefit cost ratio is 1.27. Since the BC value is greater than 1, it is acceptable project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27

The benefit cost ratio is 1.27. Since the BC value is greater than 1, it is acceptable project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27

The benefit cost ratio is 1.27. Since the BC value is greater than 1, it is acceptable project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27

The benefit cost ratio is 1.27. Since the BC value is greater than 1, it is acceptable project.

Answer 6

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27

The benefit cost ratio is 1.27. Since the BC value is greater than 1, it is acceptable project.

Answer 7

Chapter 10, Problem 1P

To determine

Calculate the Benefit cos ratio.

Answer 8

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. Benefit cost ratio (BC)can be calculated as follows.

BC=Annual receipt−Annual expenseInvestment(i(1+i)n(1+i)n−1)−Salvage value(i(1+i)n−1)=100,000−50,000200,000(0.15(1+0.15)10(1+0.15)10−1)−10,000(0.15(1+.15)10−1)=1.27