a. Based on PW method, Design Z is more economical. . The modified B/C ratio of Design Y is The modified B/C ration of Design Z is (Round to two decimal places) (Round to two decimal places) The incremental B/C ratio is (Round to two decimal places) Therefore, based on the B/C ratio method, Design Z is more economical Investment cost Annual revenue Annual cost Useful life Salvage value Net PW Design Y $140,000 $57,659 $17,618 15 years $14,700 $135,399 Design Z $275,000 $96,354 $31,687 15 years $33,000 $171,467

a. Based on PW method, Design Z is more economical. . The modified B/C ratio of Design Y is The modified B/C ration of Design Z is (Round to two decimal places) (Round to two decimal places) The incremental B/C ratio is (Round to two decimal places) Therefore, based on the B/C ratio method, Design Z is more economical Investment cost Annual revenue Annual cost Useful life Salvage value Net PW Design Y $140,000 $57,659 $17,618 15 years $14,700 $135,399 Design Z $275,000 $96,354 $31,687 15 years $33,000 $171,467

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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