Two alternatives have been proposed for a government project. The estimated costs associated with each alternative...
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Two alternatives have been proposed for a government project. The estimated costs associated with each alternative are given below. Use the modified B-C ratio method, with AW as the equivalent-worth measure, to determine which alternative should be selected at an interest rate of 3% per year. Initial cost, $ $1,250,000 $1,050,000 Annual maintenance, $/yr Annual benefits. $/yr Alternative Alternative Salvage value, $ Project life, years 11 $180,000 $125,000 $550,000 $540,000 $11,000 $9800 28 28 Two alternatives have been proposed for a government project. The estimated costs associated with each alternative are given below. Use the modified B-C ratio method, with AW as the equivalent-worth measure, to determine which alternative should be selected at an interest rate of 3% per year. Initial cost, $ $1,250,000 $1,050,000 Annual maintenance, $/yr Annual benefits. $/yr Alternative Alternative Salvage value, $ Project life, years 11 $180,000 $125,000 $550,000 $540,000 $11,000 $9800 28 28
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Answer rating: 100% (QA)
Alternative 2 should be selected Working Notes AWBenefits alte... View the full answer
Related Book For
Project Management The Managerial Process
ISBN: 9781260570434
8th Edition
Authors: Eric W Larson, Clifford F. Gray
Posted Date:
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