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Concept explainers
The annual revenue of bid
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Answer to Problem 94P
The correct answer is option
Explanation of Solution
Concept used:
Write the expression for present worth of cost.
Here, the overall cost is
Write the expression for present worth of benefit.
Here, the annual benefit is
Calculations:
Calculate the overall cost of bid
Calculate the present worth of cost of bid
Substitute
Calculate the annual benefit of bid
Calculate the present worth of benefit of bid
Substitute
Calculate the benefit cost ratio of bid
Calculate the overall cost of bid
Calculate the present worth of cost of bid
Substitute
Calculate the annual benefit of bid
Calculate the present worth of benefit of bid
Substitute
Calculate the benefit cost ratio of bid
For both options to be equivalent, the benefit cost ratio of both bids should be Equal.
The annual revenue of bid
Conclusion:
Thus, the correct answer is option
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Chapter D Solutions
ENGR.ECONOMIC ANALYSIS
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