c. AED 534.375 Problems 22 through 24 are based on the following information: A manufacturing company is evaluating three different systems that can enhance energy efficiency. In addition to the cost of the system itself, each system requires an installation cost of $20,000. Additional known information about each of these alternatives is as follows: Cost of system without installation Annual costs Annual savings Alpha Beta Gamma 30,000 50.000 65,000 10,000 8,000 6,000 18,000 19,000 20,000 The useful life of the systerns is 10 years. If none of the systems is economical, the company will not continue with the plan. Use the Rate of Return (RoR) analysis and a MARR of 8% to answer the follow questions: 22. The incremental benefit-cost ratio between Beta and Alpha is closest to: a. 9.6% b. 8.1% 0.7% d. 8% 8%

c. AED 534.375 Problems 22 through 24 are based on the following information: A manufacturing company is evaluating three different systems that can enhance energy efficiency. In addition to the cost of the system itself, each system requires an installation cost of $20,000. Additional known information about each of these alternatives is as follows: Cost of system without installation Annual costs Annual savings Alpha Beta Gamma 30,000 50.000 65,000 10,000 8,000 6,000 18,000 19,000 20,000 The useful life of the systerns is 10 years. If none of the systems is economical, the company will not continue with the plan. Use the Rate of Return (RoR) analysis and a MARR of 8% to answer the follow questions: 22. The incremental benefit-cost ratio between Beta and Alpha is closest to: a. 9.6% b. 8.1% 0.7% d. 8% 8%

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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