Engineering Board Exam Reviewer · Benefit-Cost Ratio and Payback Period · medium
A project has an initial cost of P5,000,000, annual maintenance of P200,000, and annual benefits of P900,000 for 10 years. Find the benefit-cost ratio at 8% interest.
- 1.21
- 1.8
- 0.79
- 0.95
Answer
D. 0.95
Solution
B/C= PW of benefitsPW of costs= 900,000(6.7101)5,000,000+200,000(6.7101)= 6,039,073.266,342,016.28=0.952232.
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