Calculate the conventional benefit-cost ratio for the alternative: Initial Investment Revenues Costs Salvage Value Useful life MARR Select one: a.1.3130 b.1.2960 c.1.4659 d.1.2114 e.1.3681 400000 190000 60000 100000 6 0.1

Calculate the conventional benefit-cost ratio for the alternative: Initial Investment Revenues Costs Salvage Value Useful life MARR Select one: a.1.3130 b.1.2960 c.1.4659 d.1.2114 e.1.3681 400000 190000 60000 100000 6 0.1

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter11: Risk-adjusted Expected Rates Of Return And The Dividends Valuation Approach

Section: Chapter Questions

Problem 4QE

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Question

Calculate the conventional benefit-cost ratio for the alternative:
Initial Investment
Revenues
Costs
Salvage Value
Useful life
MARR
Select one:
a.1.3130
b.1.2960
c.1.4659
d.1.2114
e.1.3681
400000
190000
60000
100000
6
0.1

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Step 1: Formula.

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Step 2: Computation of present value of revenues.

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Step 3: Computation of present value of costs.

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Step 4: Computation of present value of salvage value.

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Step 5: Computation of Conventional Benefit - cost ratio.

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