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How did they get the answer of 1.56? BCR stands for the benefit-cost ratio. A city council is planning to build a new bridge across
How did they get the answer of 1.56? BCR stands for the benefit-cost ratio.
A city council is planning to build a new bridge across a creek. This will require an immediate expenditure of $50,000, but will save citizens an estimated $8,000 in travel costs every year over the next twenty years. Alternatively, they could renovate an existing bridge. This would only cost $20,000, but the saving in travel costs would only be $2,500 every year. If the council's MARR is 10%, what is the BCR for upgrading from the renovated bridge to the new bridge? A) 1.20 B) 0.75 C) 1.64 D) 1.56 E) 2.00Step by Step Solution
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