Compute benefit cost ratio for increment between projects

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Reference no: EM131374655

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 cost)

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.

Reference no: EM131374655

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