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2. Your firm is considering the following 3 mutually exclusive alternatives. Interest rate is 10%. $21,000.00 Initial Cost $35,000.00 $42,000.00 Annual Benefit $4,200.00 $3,300.00 $5,000.00
2. Your firm is considering the following 3 mutually exclusive alternatives. Interest rate is 10%. $21,000.00 Initial Cost $35,000.00 $42,000.00 Annual Benefit $4,200.00 $3,300.00 $5,000.00 0 $1,000 1500 Salvage value Project life Forever 20 year 50 a. Calculate the Benefit Cost ratio of each project b. Which of the 3 alternatives should be selected using B/C ratio analysis (show your work)? Alternative Selected=
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