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Dmitriy789 [7]
2 years ago
8

A library shelving system has a fi rst cost of $20,000 and a useful life of 10 years. The annual maintenance is expected to be $

2,500. The annual benefi ts to the library staff are expected to be $9,000. If the effective annual interest rate is 10 percent, what is the benefi t-cost ratio of the shelving system?
Business
1 answer:
Debora [2.8K]2 years ago
3 0

Answer:

The benefit cost ratio is 1.564

Explanation:

The benefit-cost ratio is the ratio of the present value of benefits to the present value of costs. It is thus calculated as follows.

Benefit-cost ratio = Present value of benefits / Present value of costs

Present value of costs = $20,000 + $2,500 (P/A, 10%, 10 years)

                                     = $20,000 + $15,361

                                     = $35,361

Present value of benefits = $9,000 (P/A, 10%, 10 years)

                                          = $9,000 x 6.145

                                          = $55,305

Benefit-cost ratio = $55,305 / $35,361

                             = 1.564

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2 years ago
Bradford Company derived the following cost relationship from a regression analysis of its monthly manufacturing overhead cost:
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Answer:

Bradford's estimated variable manufacturing overhead cost is $127,200

Explanation:

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3 years ago
The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five comp
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Answer and Explanation:

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Average of given range value = 151÷ 15 = 10.067

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3 years ago
the aarp (american association of retired persons) pays to run an advertisement on certain television stations about protecting
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