Question: The cash flow estimates for two alternatives are given below. At an interest rate of 9% per year, use the incremental B/C ratio (AB/C) method

The cash flow estimates for two alternatives are given below. At an interest rate of 9% per year, use the incremental B/C ratio (AB/C) method to determine which one should be selected. Alternative 1 Alternative 2 Initial cost, $ 80,000 30,000 Annual M&O cost, $/year 5,000 8,000 Annual benefits, $/year 12,000 7,000 Annual disbenefits, $/year 2,500 2,000 10 20 Life, years Note: For select Alternative, select either 1 or 2. Ans: AB/C = v. Select Alternative
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