Fill in the blank with the given word bank below: In a B/C ratio, an estimate...
Fill in the blank with the given word bank below:
In a B/C ratio, an estimate is placed in the denominator when it affects the ___________.
In comparing multiple mutually exclusive alternatives by the B/C method, it is usually necessary to conduct a(an) ___________ to identify the best one
In a modified B/C ratio, M&O (maintenance and operations) costs are included in the _______________.
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Incremental analysis
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Disbenefits
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Higher
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Benefit and costs, disbenefits
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PW analysis over the LCM of lives
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Numerator
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Benefits and disbenefits, costs
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Private sector projects
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Benefactor
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Lower
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Government
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Public sector projects
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Costs
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Resultant
Homework Answers
In a B/C ratio, an estimate is placed in the denominator when it affects the Costs
In comparing multiple mutually exclusive alternatives by the B/C method, it is usually necessary to conduct a(an) Incremental analysis to identify the best one
In a modified B/C ratio, M&O (maintenance and operations) costs are included in the Numerator
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Fill in the blank with the given word bank below:
In a B/C ratio, an estimate...
Using the incremental B-C analysis, B-C ratio with PW and a MARR of 10%, choose the...
Using the incremental B-C analysis, B-C ratio with PW and a MARR of 10%, choose the best alternative from the following three mutually exclusive alternatives given below. State your assumptions. Option B Option C Option A $30000 $50000 $70000 5 10 15 Initial investment Life in years Salvage value Annual benefits 0 0 $2000 $8000 $8000 $8000
13. When comparing ................ ..... based on B/C analysis, we need to use the incremental analysis. independe...
13. When comparing ................ ..... based on B/C analysis, we need to use the incremental analysis. independent projects mutually exclusive projects both of the independent and mutually exclusive projects any project
Problem 1. Three alternative projects with infinite lives are under consideration. Initial costs and cash flows...
Problem 1. Three alternative projects with infinite lives are under consideration. Initial costs and cash flows of each project are shown. MARR is 15% per year. a) Which alternatives will be selected if projects are independent based on ROR analysis? b) Which alternatives will be selected if projects are mutually exclusive based ROR analysis? Show your solution in both cases of a) and b) (Note: A=Pi for infinite n) (You may set PW=0 or AW=0 to find i) Alternatives Initial...
Need cash flow diagram 04) Three mutually exclusive alternative are being considered Initial Cost Benefit at the end of the first Year Uniform Annual Benefits at end of subsequent years Useful Lif...
Need cash flow diagram
04) Three mutually exclusive alternative are being considered Initial Cost Benefit at the end of the first Year Uniform Annual Benefits at end of subsequent years Useful Life in years $500 $200 $100 $400 $200 $125 $300 $200 $100 At the end of its useful life, an alternative is not replaced. If MARR is 10%, which alternatives should be selected? a) Based on the payback period? b) Based on benefit-cost ratio analysis c) Benefit/Costs Analysis using...
The table below lists the costs and benefits of five mutually exclusive projects. Project Costs Benefits...
The table below lists the costs and benefits of five mutually exclusive projects. Project Costs Benefits A 9 12 B 6 5 C 3 4 D 9 11 E 4 6 (6 marks) Calculate the benefit-cost ratio (BCR) of each project: Project BCR A B C D E (6 marks) Use incremental benefit-cost analysis to determine the preferred project. Show your work. The preferred project is Project ___________
4. Project 1 costs A initially, costs B every year, generates C benefits every year and...
4. Project 1 costs A initially, costs B every year, generates C benefits every year and D disbenefits every year with a life of 5 years. Project 2 costs E initially, cost Fevery year, generates G benefits every year and H disbenefits every year with a life of 6 years. Project 3 costs I initially, costs) every year, generates K benefits every year and L disbenefits every year with a life of 10 years. Use an annual rate of R...
4. Project 1 costs A initially, costs B every year, generates C benefits every year and...
4. Project 1 costs A initially, costs B every year, generates C benefits every year and D disbenefits every year with a life of 5 years. Project 2 costs e initially, cost F every year, generates G benefits every year and H disbenefits every year with a life of 6 years. Project 3 costs I initially, costs J every year, generates K benefits every year and L disbenefits every year with a life of 10 years. Use an annual rate...
Which alternative of the three alternatives below should be selected if the MARR = 6%? Use...
Which alternative of the three alternatives below should be selected if the MARR = 6%? Use the following to compare projects: a. PW analysis b. B/C ratio for each project c. Incremental B/C ratio assessment (define Defender and Challenger in each analysis) d. IRR for each project over its respective service life e. Incremental IRR using the same (a common) number of years for each project Are any of the projects acceptable? Are any not acceptable? Which project would you...
1. Which alternative of the three alternatives below should be selected if the MARR = 6%?...
1. Which alternative of the three alternatives below should be selected if the MARR = 6%? Use the following to compare projects: PW analysis B/C ratio for each project Incremental B/C ratio assessment IRR for each project over its respective service life Incremental IRR using the same (a common) number of years for each project Are any of the projects acceptable? Are any not acceptable? Which project would you recommend and why? Alternatives: A B C First Cost $800 $300 ...
C a ngo are two mutually exclusive alternatives with different lives Based on the data provided...
C a ngo are two mutually exclusive alternatives with different lives Based on the data provided and the LCM approach, determine the correct equations to find PW of each machine at an interest rate of 12% per year. Machine A Machine B Initial costs -85.000 - 75.000 Annual cost, $/year -10,000 - 15,000 Salvage values 10.000 25.000 Ufe, years O PWA-25,000 -10.0001P/A.12%,.3) +10,0001P/F.12.3) PWB-75.000 - 15.00PA, 12%,2)-75.000 P/E.125425000/5,12. O PWA-85.000 - 10.000 P/A 12%.3) 10.0001P/E 12.8 PW -75.000 - 15.00PVA...
Using the incremental B-C analysis, B-C ratio with PW and a MARR of 10%, choose the best alternative from the following three mutually exclusive alternatives given below. State your assumptions. Option B Option C Option A $30000 $50000 $70000 5 10 15 Initial investment Life in years Salvage value Annual benefits 0 0 $2000 $8000 $8000 $8000
13. When comparing ................ ..... based on B/C analysis, we need to use the incremental analysis. independent projects mutually exclusive projects both of the independent and mutually exclusive projects any project
Problem 1. Three alternative projects with infinite lives are under consideration. Initial costs and cash flows of each project are shown. MARR is 15% per year. a) Which alternatives will be selected if projects are independent based on ROR analysis? b) Which alternatives will be selected if projects are mutually exclusive based ROR analysis? Show your solution in both cases of a) and b) (Note: A=Pi for infinite n) (You may set PW=0 or AW=0 to find i) Alternatives Initial...
Need cash flow diagram
04) Three mutually exclusive alternative are being considered Initial Cost Benefit at the end of the first Year Uniform Annual Benefits at end of subsequent years Useful Life in years $500 $200 $100 $400 $200 $125 $300 $200 $100 At the end of its useful life, an alternative is not replaced. If MARR is 10%, which alternatives should be selected? a) Based on the payback period? b) Based on benefit-cost ratio analysis c) Benefit/Costs Analysis using...
4. Project 1 costs A initially, costs B every year, generates C benefits every year and D disbenefits every year with a life of 5 years. Project 2 costs E initially, cost Fevery year, generates G benefits every year and H disbenefits every year with a life of 6 years. Project 3 costs I initially, costs) every year, generates K benefits every year and L disbenefits every year with a life of 10 years. Use an annual rate of R...
4. Project 1 costs A initially, costs B every year, generates C benefits every year and D disbenefits every year with a life of 5 years. Project 2 costs e initially, cost F every year, generates G benefits every year and H disbenefits every year with a life of 6 years. Project 3 costs I initially, costs J every year, generates K benefits every year and L disbenefits every year with a life of 10 years. Use an annual rate...
C a ngo are two mutually exclusive alternatives with different lives Based on the data provided and the LCM approach, determine the correct equations to find PW of each machine at an interest rate of 12% per year. Machine A Machine B Initial costs -85.000 - 75.000 Annual cost, $/year -10,000 - 15,000 Salvage values 10.000 25.000 Ufe, years O PWA-25,000 -10.0001P/A.12%,.3) +10,0001P/F.12.3) PWB-75.000 - 15.00PA, 12%,2)-75.000 P/E.125425000/5,12. O PWA-85.000 - 10.000 P/A 12%.3) 10.0001P/E 12.8 PW -75.000 - 15.00PVA...
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