Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Using benefit-cost ratio analysis, a 10-year useful life, and a 25% MARR, determine which of the following mutually exclusive alternatives should be selected
Using benefit-cost ratio analysis, a 10-year useful life, and a 25% MARR, determine which of the following mutually exclusive alternatives should be selected. A B ? D E $300 $400 $500 Cost $100 Annual benefit 37 $205 60 83 137 150 Recommendation: Oprion E Recommendation: Oprion D O Recommendation: Oprion C Recommendation: Oprion B
Option 2.
From the below table we can observe that alternative D needs to be selected as the B:C ratio is highest among the given options after alternative A
|
Y |
Discount Factor |
A |
Discounted Cash flow A |
B |
Discounted Cash flow B |
C |
Discounted Cash flow C |
D |
Discounted Cash flow D |
E |
Discounted Cash flow E |
|
0 |
1.00 |
100 |
100.00 |
205 |
205.00 |
300 |
300.00 |
400 |
400.00 |
500 |
500.00 |
|
1 |
0.80 |
37 |
29.60 |
60 |
48.00 |
83 |
66.40 |
137 |
109.60 |
150 |
120.00 |
|
2 |
0.64 |
37 |
23.68 |
60 |
38.40 |
83 |
53.12 |
137 |
87.68 |
150 |
96.00 |
|
3 |
0.51 |
37 |
18.94 |
60 |
30.72 |
83 |
42.50 |
137 |
70.14 |
150 |
76.80 |
|
4 |
0.41 |
37 |
15.16 |
60 |
24.58 |
83 |
34.00 |
137 |
56.12 |
150 |
61.44 |
|
5 |
0.33 |
37 |
12.12 |
60 |
19.66 |
83 |
27.20 |
137 |
44.89 |
150 |
49.15 |
|
6 |
0.26 |
37 |
9.70 |
60 |
15.73 |
83 |
21.76 |
137 |
35.91 |
150 |
39.32 |
|
7 |
0.21 |
37 |
7.76 |
60 |
12.58 |
83 |
17.41 |
137 |
28.73 |
150 |
31.46 |
|
8 |
0.17 |
37 |
6.21 |
60 |
10.07 |
83 |
13.93 |
137 |
22.98 |
150 |
25.17 |
|
9 |
0.13 |
37 |
4.97 |
60 |
8.05 |
83 |
11.14 |
137 |
18.39 |
150 |
20.13 |
|
10 |
0.11 |
37 |
3.97 |
60 |
6.44 |
83 |
8.91 |
137 |
14.71 |
150 |
16.11 |
|
Cost |
100.00 |
Cost |
205.00 |
Cost |
300.00 |
Cost |
400.00 |
Cost |
500.00 |
||
|
Benefit |
132.11 |
Benefit |
214.23 |
Benefit |
296.35 |
Benefit |
489.16 |
Benefit |
535.58 |
||
|
B:C |
1.32 |
B:C |
1.05 |
B:C |
0.99 |
B:C |
1.22 |
B:C |
1.07 |
