Consider four alternatives A, B, C, and D with their respective annual benefits, disbenefits, costs and savings. Alternative Benefits P180,000 P250,000 P300,000 P400,000 Disbenefits P42,000 P68,000 P92,000 P118,000 Costs P128,000 P184,000 P265,000 P288,000 Savings P16,000 P27,000 P38,000 P54,000 Calculate the B/C ratio and (B-C) criterion for each alternative. Using the incremental B/C ratio, determine which alternative should be selected. O Select Alternative A O Select Alternative C O Select Alternative B O Select Alternative D

Consider four alternatives A, B, C, and D with their respective annual benefits, disbenefits, costs and savings. Alternative Benefits P180,000 P250,000 P300,000 P400,000 Disbenefits P42,000 P68,000 P92,000 P118,000 Costs P128,000 P184,000 P265,000 P288,000 Savings P16,000 P27,000 P38,000 P54,000 Calculate the B/C ratio and (B-C) criterion for each alternative. Using the incremental B/C ratio, determine which alternative should be selected. O Select Alternative A O Select Alternative C O Select Alternative B O Select Alternative D

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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Alternatives B and C are replaced at the end of their useful lives with identical replacements. Find the best alternative using MARR = 10%. Data Initial Cost Uniform Annual Benefit Useful Life a) Benefit to Cost ratio analysis b) Payback Period Analysis Alt. A $6,00 $150 20 Alt. B $900 $300 5 Alt. C $1,800 $450 10
What is the best alternative using incremental Analysis? Use MARR = 15% A B C Capital Investment $ 2,000 7,000 4,200 Annual Revenues 3,200 8,000 6,000 Аппиal Costs 2, 100 5, 100 4,000 Market Value at the end of useful life 100 600 420 Useful Life (in years) 10 10 10 The correct ranking of Alternative is Blank 1 Select Alternative Blank 2 Note: Do not put comma, unit of measure and limit your answer to two decimal places. Ex: A-B-C
Would love some help on how to approach this - thanks! The cash flows for three different alternatives are given in table below. MARR =10%. Alt. A Alt. B Alt. C Initial cost $5,000 9,000 7,500 Annual benefits $1,457 2,518 2,133 RoR 14% 13% 12.4% Life in years 5 1. ΔRoR for the first increment (Alt. C-Alt. A) is ___________________. A.10.12% B. 9.38% C. 11.85% D. 11.00% 2. ΔRoR for the second increment is ___________________. A. 10.12% B. 9.38% C. 8.94% D. 9.87% 3. The best alternative for a MARR of 10% using the incremental rate of return analysis is ____________. A. Alt. C B. Alt. A C. Alt. B D. Do nothing
:[A] { > Incremental analysis ([ B Alternative], [B wins ]): C A company considering 2 different machines at MARR at 12% Both life spans = 10 years Initial Cost Annual Operating lost Benefits per yin ar Salvage Value \table MM If you are and of frying investment to company decide More than 2 alternatives if the additional increment is worth while, compare Alternative: A Incremental analysis (Alternative) pairs then B C A MARR Company at Considering 2 different machines at 12% Both life spans = 10 years. M/C X м/с у Initial Cost 160000 285000 Annual Operating Cost Benefits per year Salvage Value 45 000 90000 45000 105000 20000 40000
Evaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method Annual worth method Future worth method I.R.R method E.R.R Method E.R.R.R method M.A.R.R = 15% the details of alternatives are shown in the table below Alternatives A Investments $6,000 $7,500 Useful life (years) 10 Annual disbursements $2,500 $3,500 Annual revenues $4,500 $6,000 Salvage values $500 $1,000
Evaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method 3 Annual worth method, Future worth method E.R.R Method , E.R.R.R method I.R.R method M.A.R.R=15%, the details of alternatives are shown in the table below Alternatives A B Investments $120,000 $155,000 Useful life (years) 15 20 Annual disbursements $25,000 $35,000 Annual revenues $45,000 $60,000 Salvage values $25,000 $30,000
Complete the following analysis of cost alternatives and select the preferred alternative. The s A D Сapital investment $15,000 S16,000 $13,000 $18,000 Annual costs Market value 250 300 500 100 1,000 1,300 1,750 2,000 at EOY 10 FW(12%) -$49,975 –$53,658 ??? –$55,660 tudy period is 10 years and the MARR = 12% per %3D year.
Qutestion 3 Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost $50,000 Annual maintenance cost $4,000 Estimated annual benefit $15,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select B with B/C=1.14 b. Select B with B/C=1.41 c. Select A with B/C=1.14 d. Reject A with B/C=1.14
Q5 solution needed
Evaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method, Annual worth method, Future worth method I.R.R method , E.R.R Method .E.R.R.R method M.A.R.R=15%, the details of alternatives are shown in the table below Alternatives A B Investments $60,000 $75,000 Useful life (years) 5 15 Annual disbursements $25,000 $35,000 Annual revenues $45,000 $60,000 Salvage values $5,000 $10,000
The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. ALB Alt. C 27,000 24,000 7,600 6,500 13% 11% Initial cost Annual benefits ROR Life in years Alt. A $15,000 $4,500 15% 5 Reference: Case Study 8 The best alternative for a MARR of 2.0% using the incremental rate of return analysis is A. Alt. C B. Alt. B C. Alt. A OD.Do-nothing
Given cash flows for two alternatives as shown in table below, choose the most attractive alternative if MARR = 8%. Year 0 1 2 3 through ∞ Alt. A -$42K $3.6K $3.6K $3.6K Alt. B -$54K $4.7K $4.7K $4.7K Group of answer choices Alt. A Alt. B Select neither Select either