The two alternatives shown are under consideration for improving security at a facility. Determine which one should be selected, if any, based on a B/C analysis. Consider an interest rate of 7% per year and a 10-year study period. Additional information is provided in Table Q 6(b).

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
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The two alternatives shown are under consideration for improving security at a facility.
Determine which one should be selected, if any, based on a B/C analysis. Consider an
interest rate of 7% per year and a 10-year study period. Additional information is provided
in Table Q 6(b).
Page 4 of 5
Table Q 6(b)
Alternative 1: Extra Cameras | Alternative 2: New Sensors
First cost, $
Annual O&M cost, $
38000
87000
49000
64000
Annual benefits, $
Annual disbenefits, $
110000
160000
26000
Transcribed Image Text:The two alternatives shown are under consideration for improving security at a facility. Determine which one should be selected, if any, based on a B/C analysis. Consider an interest rate of 7% per year and a 10-year study period. Additional information is provided in Table Q 6(b). Page 4 of 5 Table Q 6(b) Alternative 1: Extra Cameras | Alternative 2: New Sensors First cost, $ Annual O&M cost, $ 38000 87000 49000 64000 Annual benefits, $ Annual disbenefits, $ 110000 160000 26000
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