1. Determine the B/C ratio for the following project First Cost Р100, 000 Project life, years Salvage value 5 P10, 000 Annual benefits P60, 000 Annual O and M P22, 000 Interest rate, % 15 Ans: B/C = 1.16 2. Data for two alternatives are as follows: | Alternatives A В Investment P35, 000 P50, 000 Annual benefits Annual O and M Estimated life, years Net salvage value Р20, 000 P25, 000 P6, 450 P13, 830 4 8. Р3, 500 sing an interest rate of 20%, which alternative should be chosen? Ans: Alternative A is referred over Alternative B
1. Determine the B/C ratio for the following project First Cost Р100, 000 Project life, years Salvage value 5 P10, 000 Annual benefits P60, 000 Annual O and M P22, 000 Interest rate, % 15 Ans: B/C = 1.16 2. Data for two alternatives are as follows: | Alternatives A В Investment P35, 000 P50, 000 Annual benefits Annual O and M Estimated life, years Net salvage value Р20, 000 P25, 000 P6, 450 P13, 830 4 8. Р3, 500 sing an interest rate of 20%, which alternative should be chosen? Ans: Alternative A is referred over Alternative B
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.3.1P
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