Table 9
Data for four mutually exclusive alternatives are given in the table below. Assume a life of 7 years and a MARR of 9%,
$$\begin{array} { | l | l | l | l | l | }
\hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } & \begin{array} { l }
\text { Alt. D } \
\text { Do Nothing }
\end{array} \
\hline \text { Iritial Cost } & \$ 5,600 & \$ 3,400 & \$ 1,200 & \$ 0 \
\hline \text { EUAB } & \$ 1,400 & \$ 1,000 & \$ 400 & \$ 0 \
\hline \text { Salvage Value } & \$ 400 & \$ 0 & \$ 0 & \$ 0 \
\hline
\end{array}$$
-The ?B /?C ratio for the second increment, (B-C) is _____________.
A) 1.37
B) 0.84
C) 1.45
D) 1.86

Question

Table 9
Data for four mutually exclusive alternatives are given in the table below. Assume a life of 7 years and a MARR of 9%,
 $$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } & \begin{array} { l } 
\text { Alt. D } \
\text { Do Nothing }
\end{array} \
\hline \text { Iritial Cost } & \$ 5,600 & \$ 3,400 & \$ 1,200 & \$ 0 \
\hline \text { EUAB } & \$ 1,400 & \$ 1,000 & \$ 400 & \$ 0 \
\hline \text { Salvage Value } & \$ 400 & \$ 0 & \$ 0 & \$ 0 \
\hline
\end{array}$$
-The ?B /?C ratio for the second increment, (B-C) is _____________.
A) 1.37
B) 0.84
C) 1.45
D) 1.86

Quizplus · Accepted Answer

The ?B /?C ratio for the second increment, (B-C) is 1.37. This is because the EUAB for Alternative B is $1,000 and the EUAB for Alternative C is $400. The difference between these two values is $600. The initial cost of Alternative B is $3,400 and the initial cost of Alternative C is $1,200. The difference between these two values is $2,200. Therefore, the ?B /?C ratio for the second increment is $600 / $2,200 = 1.37.

Table 9 Data for Four Mutually Exclusive Alternatives Are Given

Table 9
Data for Four Mutually Exclusive Alternatives Are Given