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A City is considering a replacement for its police radio. The benefits and costs of the replacement are shown below. Purchase Cost: $7,200 Annual Savings:

A City is considering a replacement for its police radio. The benefits and costs of the replacement are shown below.

Purchase Cost: $7,200

Annual Savings: $1,500

Annual Costs: $300

Life: 15 years

What is the replacements benefit-cost ratio if the effective annual interest rate is 8%? (15 pts)

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