Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 70 years, and the sponsoring agency's MARR is 13% per year. Annual benefits to the public have been estimated by an advisory committee and are shown
below. Use the B-C method (incrementally) to select the best jogging track.
Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.)
The best jogging track is alternative
Initial cost
Annual benefits
B-C ratio
Alternative
A
D
B
с
A
$54,000
$7,500
1.07
B
$64,000 $150,000
$11,000 $21,000
1.32
1.08
C
Alternative
Inc. B-C ratio
1.07
3.08
2.31
0.89
Is the alternative acceptable?
Yes
Yes
Yes
No
D
$59,000
$9,500
1.24
▼
D
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Transcribed Image Text:Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 70 years, and the sponsoring agency's MARR is 13% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track. Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) The best jogging track is alternative Initial cost Annual benefits B-C ratio Alternative A D B с A $54,000 $7,500 1.07 B $64,000 $150,000 $11,000 $21,000 1.32 1.08 C Alternative Inc. B-C ratio 1.07 3.08 2.31 0.89 Is the alternative acceptable? Yes Yes Yes No D $59,000 $9,500 1.24 ▼ D
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