Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help with steps Two mutually exclusive dosign altematives aro boing considored. The estimated cash flows for oach altornative are given bolow. The MARR is

please help with steps
image text in transcribed
Two mutually exclusive dosign altematives aro boing considored. The estimated cash flows for oach altornative are given bolow. The MARR is 12% por year. The decision-maker can solect one of theso altornatives or decide to select none of them. Make a recommendation based on the following methods. a. Based on PW method, Design is more economical. b. The modified B/C ratio of Design Y is (Round to two decimal places) The modified B/C ration of Design Z is (Round to two decimal places) c. The incremental B/C ratio is (Round to two decimal places) Therefore, based on the B/C ratio method, Design is more economical d. The discounted payback period of Design Y is years (Round to one decimal place) The discounted payback period of Design Z is years (Round to one decimal place) Therefore, based on the payback period method, Design would be preferred. (e) Why could the recommendations based on the payback period method be different from the other two methols? A. because the payback period gives more weight to the cash flows affer the payback period B. because the payback period method ignores the cash flows after the payback period

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Portfolio Mathematics

Authors: Vince

1st Edition

0471757683, 978-0471757689

More Books

Students also viewed these Finance questions

Question

3. Describe the communicative power of group affiliations

Answered: 1 week ago