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Stock to be purchased.
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Answer to Problem 74P
Since the benefit-cost is highest for the stock of S. Products, investment should be made in S Products.
Explanation of Solution
Given information:
Minimum rate of return = 10%.
Six stocks are available.
Calculate the ratio of PW of benefits and PW of costs for each stock.
Conclusion:
Since the benefit-cost is highest for the stock of S. Products, investment should be made in S Products.
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Chapter 5 Solutions
Engineering Economic Analysis
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
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