The city has a budget of $200m and would like to choose among three projects A, B,
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Question:
The city has a budget of $200m and would like to choose among three projects A, B, or C. The projects have the following benefits and costs:
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Project | Costs | 1 | 2 | 3 | 4 | 5 |
A | 150 | 230 | 10 | 15 | 15 | 15 |
B | 80 | 0 | 0 | 0 | 0 | 255 |
C | 40 | 20 | 20 | 20 | 20 | 20 |
Using a 5% discount rate:
Use the above information to:
complete the following information
Project | Costs | PV(B) | NPV | RankNPV | BCR | RankBCR |
A | 150 | |||||
B | 80 | |||||
C | 40 |
Use the information in the table to make a recommendation, explaining your choice in each of the following cases.
a. The projects were mutually exclusive
b. If these projects were independent, and indivisible (your budget is $200m)
c. if the projects were independent, and divisible (your budget is $200m)
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