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Homework answers / question archive / Using the Common Termination analysis method for the alternative investments with unequal lifetimes listed in the table below, calculate the benefit cost ratio of each
Using the Common Termination analysis method for the alternative investments with unequal lifetimes listed in the table below, calculate the benefit cost ratio of each. Fill in the values necessary (a. e.) to determine these B/C ratios. Which investment should you recommend to your boss based on this method of analysis. Investment A (5 year life) Investment B (10 year life) Investment Cost S5,000 $7,000 Discount Benefits Rate 10% 10% 5 Year Present Value of Benefits $10,200 $7,900 Salvage Value 0 $3,200 PV Benefits + Salvage c. ? B/C Ratio b.? a. ? d.? e. Which investment would you recommend based on common termination (A or B)?