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2) Using benefit-cost ratio analysis, determine which one of the three mutually exclusive alternatives should be selected. Each alternative has a six-year useful life. Assume
2) Using benefit-cost ratio analysis, determine which one of the three mutually exclusive alternatives should be selected. Each alternative has a six-year useful life. Assume a 10% MARR. a. Convert cost and salvage to an equivalent series. (Hint: use both to calculate EUAC) b. Determine B/C for each device C. Perform incremental B/C ratio analysis for: i. Device A-Device B ii. Device B - Device First Cost Uniform Annual Benefit Salvage Value Device A $ 560 $ 140 $ 40 Device B S 340 $ 100 $ 0 Device C $ 120 $ 40 $ 0
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