Question 7 Part A: Which project (or projects) can be immedia eliminated? O Project 205 O Project 105 O Project 305 O Project 405

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
8th Edition
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter11: The Basics Of Capital Budgeting
Section: Chapter Questions
Problem 11P: CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS Project S costs 15,000, and its expected...
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Question 30
Question 7 Part A: Oregon is examining how to allocate funding over the
next five years and have arrived at four projects that are in contention.
The numerical details are listed below (Oregon uses a MARR of 10% for
new projects):
Project
105
205
305
405
Initial Cost
2,500,000
2,500,000 3,000,000 2,000,000
Annual
Maintenance
250,000
250,000
200,000
300,000
Cost
Yearly Benefit
1,000,000
900,000
900,000
1,000,000
Yearly Disbenefit 15,000
10,000
100,000
B/C Ratio
1.08
0.98
0.91
1.09
Transcribed Image Text:Question 30 Question 7 Part A: Oregon is examining how to allocate funding over the next five years and have arrived at four projects that are in contention. The numerical details are listed below (Oregon uses a MARR of 10% for new projects): Project 105 205 305 405 Initial Cost 2,500,000 2,500,000 3,000,000 2,000,000 Annual Maintenance 250,000 250,000 200,000 300,000 Cost Yearly Benefit 1,000,000 900,000 900,000 1,000,000 Yearly Disbenefit 15,000 10,000 100,000 B/C Ratio 1.08 0.98 0.91 1.09
B/C Ratio
1.08
0.98
0.91
1.09
Question 7 Part A: Which project (or projects) can be immediately
eliminated?
O Project 205
O Project 105
O Project 305
O Project 405
Transcribed Image Text:B/C Ratio 1.08 0.98 0.91 1.09 Question 7 Part A: Which project (or projects) can be immediately eliminated? O Project 205 O Project 105 O Project 305 O Project 405
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