Calculate the Benefit cos ratio.

Question

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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.

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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.

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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.

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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.

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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