Transcribed Image Text: 1. Determine the B/C ratio for the following project First Cost P100, 000 Project life, years 5 Salvage value Annual benefits P10, 000 P60, 000 Annual O

Transcribed Image Text: 1. Determine the B/C ratio for the following project
First Cost
P100, 000
Project life, years
5
Salvage value
Annual benefits
P10, 000
P60, 000
Annual O and M
Interest rate, %
P22, 000
15
Ans: B/C = 1.16
2. Data for two alternatives are as follows:
Alternatives
A
В
Investment
Р35, 000
P50, 000
Annual benefits
P20, 000
P25, 000
Annual O and M
Estimated life, years
Net salvage value
Ре, 450
P13, 830
4
8.
Р3, 500
Using an interest rate of 20%, which alternative should be chosen?
Ans: Alternative A is referred over Alternative B

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