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In: Economics

The following two investment alternatives are being evaluated using the​ B/C ratio method. The alternatives have...

The following two investment alternatives are being evaluated using the​ B/C ratio method. The alternatives have a​ 5-year service life and the MARR is 18​% per year.

Alternative

A

Alternative

B

Capital investment

​$10,900

  

​$16,000

  

Annual revenues

4,000  

7,500  

Annual costs

250  

900  

Market value at EOY 5

5,000  

9,200  

Click the icon to view the interest and annuity table for discrete compounding when i equals=18​%per year.

Calculate the modified​ B/C ratio of Alternative A

A.

1.32

B.1.35

C.1.26

D.0.90

Calculate the incremental modified​ B/C ratio between the two alternatives

A.

2.73

B.1.79

C.1.28

D.2.07

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