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Consider the data for the following two alternatives, X and Y. Use the benefit-to-cost ratio method to work the problem. MARR = 8% Alternative X

Consider the data for the following two alternatives, X and Y. Use the benefit-to-cost ratio method to work the problem. MARR = 8%

Alternative X

Y

First Cost $100,000 140,000
Operating Costs/year 50,000 60,000
Benefits/year 100,000 120,000
Dis-benefits 30,000 25,000
Life in years 5 10

Ratio B / C = (EW of net benefits) / (EW of initial costs + EW of operating costs) EW - Equivalent Worth Determine the B / C ratio for X.

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