Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Q.3. What are the conventional and modified Benefit to Cost ratios and how these are used in capital investment decisions. Check in your workplace where

image text in transcribed

Q.3. What are the conventional and modified Benefit to Cost ratios and how these are used in capital investment decisions. Check in your workplace where equipment can be replaced by alternative brand with different price to buy and/ or different salvage value/ resale value/ disposal cost at the end of life, might have different cost to operate due to different energy rating, power consumption, spare parts etc. and different capacity/ production rate and/ or quality resulting different price of products from alternative options. Alternatively consider that two alternative machines will produce the same product, but one will produce higher quality items which can be expected to return greater revenue Given the following data, determine which machine is better. Use the B/C method, a study period of 10 years, and a MARR of 10% Machine A $20,000 120,000 Machine B First cost: Salvage value Annual receipts: Annual disbursements: $30,000 0 150,000 140,000 2,000 110,000 Determine the B/C values for each machine by using both the conventional and the modified formulations Use excel and attach file as embedded file in word document/ upload file in Moodle for your analysis Q.3. What are the conventional and modified Benefit to Cost ratios and how these are used in capital investment decisions. Check in your workplace where equipment can be replaced by alternative brand with different price to buy and/ or different salvage value/ resale value/ disposal cost at the end of life, might have different cost to operate due to different energy rating, power consumption, spare parts etc. and different capacity/ production rate and/ or quality resulting different price of products from alternative options. Alternatively consider that two alternative machines will produce the same product, but one will produce higher quality items which can be expected to return greater revenue Given the following data, determine which machine is better. Use the B/C method, a study period of 10 years, and a MARR of 10% Machine A $20,000 120,000 Machine B First cost: Salvage value Annual receipts: Annual disbursements: $30,000 0 150,000 140,000 2,000 110,000 Determine the B/C values for each machine by using both the conventional and the modified formulations Use excel and attach file as embedded file in word document/ upload file in Moodle for your analysis

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

Step: 3

blur-text-image

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

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

13th Edition

8120335643, 136126634, 978-0136126638

More Books

Students also viewed these Accounting questions