At what interest rate the 5-year Benefit-Cost-Ratio (BCR) becomes unity for an equipment project with the immediate installation cost of -$2500 (in year 0) and a maintenance cost of -$1500 in year 3, and annual benefit of $1000 from the first year onward (n=1 to 5)?
At what interest rate the 5-year Benefit-Cost-Ratio (BCR) becomes unity for an equipment project with the immediate installation cost of -$2500 (in year 0) and a maintenance cost of -$1500 in year 3, and annual benefit of $1000 from the first year onward (n=1 to 5)?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 15PROB
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Transcribed Image Text:At what interest rate the 5-year Benefit-Cost-Ratio (BCR) becomes unity for an equipment
project with the immediate installation cost of -$2500 (in year 0) and a maintenance cost of
-$1500 in year 3, and annual benefit of $1000 from the first year onward (n=1 to 5)?
Select one:
O A. 12.5%
O B. 11.5%
OC. 14.5%
O D. 13.5%
O E. 5%
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