Ratio method to select one of these two alternatives

Reference no: EM13690319

Use the b/c ratio method to select one of these two alternatives: alternative 1 has an initial cost of 100$, has annual maintenance costs of $5 per year and has potential damage costs of $950. Alternative 2 has an initial cost of $110, annual maintenance costs of $9 per year and potential damage costs of $350. the interest rate is 20% per year, we will examine the case on a 20-year study period and we assume that the damage costs occur in the middle of the period, which is year 10?

Reference no: EM13690319

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