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7. Determine which of the following alternatives is the most efficient and which is the most profitable using the Incremental Benefit/Cost ratio (AB/AC) method.

 

7. Determine which of the following alternatives is the most efficient and which is the most profitable using the Incremental Benefit/Cost ratio (AB/AC) method. Rate is 4% per year. Construction $ Benefits $/yr Life years A 1,000,000 300,000 10 B 1,800,000 320,000 15 C 3,000,000 380,000 23 D 3,500,000 340,000 38 8. Plot these the annualized cost and benefits of the alternatives in Q.7 using an x-y Excel graph and sketch the B/C and AB/AC values. What do you observe?

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