EBK ENGINEERING ECONOMY
EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
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Chapter 10, Problem 11P
To determine

Calculate the benefit cost ratio.

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IBM is considering an environmentally conscious green building at one of its new production facilities. The company will decide among three different green designs for the facility, and each of the final mutually exclusive concepts for the facility results in different costs and savings. These threeconcepts are summarized below. IBM uses 10% per year as its profitability benchmark (hurdle rate) for such comparisons. Which facility concept should be selected?
Five mutually exclusive alternatives are being considered for providing a sewage- treatment facility. The annual equivalent costs and estimated benefits of the alternatives are as follows: Alternative Annual Equivalent (in thousands) Cost $1,050 Benefits $1,110 B 900 $1,810 C 1,230 $1,390 D 1,350 $1,500 E 990 $1,140 Which plan, if any, should be adopted if the Sewage Authority wishes to invest if, and only if, the B-C ratio is at least 1.0.?
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