Question: Two mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given below. The MARR is 8% per year. The

 Two mutually exclusive design alternatives are being considered. The estimated cash
flows for each alternative are given below. The MARR is 8% per

Two mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given below. The MARR is 8% per year. The decision-maker can select one of these alternatives or decide to select none of them. Make a recommendation based on the following methods. a. Based on PW method, Design is more economical. b. The modified B/C ratio of Design Y is The modified B/C ration of Design Z is (Round to two decimal places) c. The incremental B/C ratio is (Round to two decimal places) Therefore, based on the B/C ratio method, Design is more economical d. The discounted payback period of Design Y is years (Round to one decimal place) The discounted payback period of Design Z is years (Round to one decimal place) Therefore, based on the payback period method, Design would be preferred. (e) Why could the recommendations based on the payback period method be different from the other two methods? A. because the payback period method ignores the cash flows after the payback period B. because the payback period gives more weight to the cash flows after the payback period

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