Two mutually exclusive alternatives

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Reference no: EM131047252

Consider the following two mutually exclusive alternatives. Each alternative has a 10-year useful life and no salvage value. If the interest rate is 10%, which alternative should be selected? Answer in terms of benefit-cost ratio analysis.

Cash Flow A B

Initial cost (–$6,000) (–$9,000)

Annual benefits $1,000 $1,500

Reference no: EM131047252

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