The city council of Morristown is considering the purchase of one new fire truck. The options are Truck X and Truck Y. The purchase is to be financed by money borrowed at 13%per year. What is the conventional B-C ratio for Truck X? The appropriate financial data are as follows:

 

a. 0.79

b. 1.20

c. 1.84

d. 1.26

e. 1.3

Transcribed Image Text:

Capital investment Maintenance cost per year Useful life Reduction in fire damage per year Dounding when the MARR is 13% per year. Truck X $53,000 $5,500 7 years $22,000 Truck Y $62,000 $6,000 7 years $24,000 Capital investment Maintenance cost per year Useful life Reduction in fire damage per year Dounding when the MARR is 13% per year. Truck X $53,000 $5,500 7 years $22,000 Truck Y $62,000 $6,000 7 years $24,000

Answer rating: 100% (QA)

Correct answer 126 BC of truck X Benefit ... View the full answer