10.4 (LG 10.4) The following data are available for two mutually exclusive projects: Project A Project B PW(benefits) $19 000 000 $15 000 000 PW(operating and maintenance costs) 5 000 000 8 000 000 PW(capital cost) 5 000 000 1 000 000 a. Compute the benefit-cost ratios for both projects. b. Compute the modified benefit-cost ratios for both projects. c. Compute the benefit-cost ratio for the increment between the projects. d. Compute the present worths of the two projects. e. Which is the preferred project? Explain.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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plz do only d AND e PLZ 

10.4 (LG 10.4) The following data are available for two mutually exclusive projects:
Project A
Project B
PW(benefits)
$19 000 000
$15 000 000
PW(operating and maintenance costs)
5 000 000
8 000 000
PW(capital cost)
5 000 000
1 000 000
a. Compute the benefit-cost ratios for both projects.
b. Compute the modified benefit-cost ratios for both projects.
c. Compute the benefit-cost ratio for the increment between the projects.
d. Compute the present worths of the two projects.
e. Which is the preferred project? Explain.
Transcribed Image Text:10.4 (LG 10.4) The following data are available for two mutually exclusive projects: Project A Project B PW(benefits) $19 000 000 $15 000 000 PW(operating and maintenance costs) 5 000 000 8 000 000 PW(capital cost) 5 000 000 1 000 000 a. Compute the benefit-cost ratios for both projects. b. Compute the modified benefit-cost ratios for both projects. c. Compute the benefit-cost ratio for the increment between the projects. d. Compute the present worths of the two projects. e. Which is the preferred project? Explain.
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