Question: Three mutually exclusive projects are being considered for investment. Their costs and their estimated benefits are as follows: a. Which plan(s) should be adopted, if

Three mutually exclusive projects are being considered for investment. Their costs and their estimated benefits are as follows:

a. Which plan(s) should be adopted, if any, if the controlling board wishes to invest any amount required, provided that the B-C ratio on the required investment is at least 1?
b. Suppose that 8% of the costs of each plan are reclassified as disbenefits. What percentage change in the B-C ratio of each plan results from the reclassification?
c. Comment on why the rank-orderings in (a) are unaffected by the change in (b).

Pw (S) Benefits $115,000 $135,000 $120,000 Project Costs $230,000 $255, $80,000

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