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A project expected to produce $35,000 in net benefits with an initial investment of $20,000 and discounted annual operating costs of $8,000. Determine the following
A project expected to produce $35,000 in net benefits with an initial investment of $20,000 and discounted annual operating costs of $8,000.
Determine the following showing formulas, calculations, and results.
(a) Calculate the benefit-cost ratio and indicate if the project should be selected
(b) Calculate the profitability index (modified cost-benefit ratio or net benefit cost ratio) and explain the meaning of the result
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