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Marrrta [24]
4 years ago
15

A state agency is considering two mutually exclusive alternatives for upgrading the skills of its technical staff.

Business
1 answer:
anyanavicka [17]4 years ago
3 0

Answer:

Alternative 1 with B/C ratio of 1.21

Explanation:

Benefit to cost analysis can be computed as follows to determine which project is worthwhile.

Alternative 1

B/C ratio = 1,020,000 / 840,900 = 1.21

Alternative 2

B/C ratio = 1,990,000 / 1,780,000 = 1.12

Both of the projects yield a positive ratio which is grater than 1, however the B/C ratio of alternative 1 is healthier and given the fact that it requires less initial outlay; this might be a good choice for the agency to adopt. The final decision would be taken by considering more than just these factors.

Hope that helps.

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